Life Assurance Policy

2007-03-08 10:33:40

( Insurance )



Life assurance policy is a form of saving and investing. It is a settlement where the policy owner pays a premium and in turn, death benefits are given to his dependents or beneficiaries. The death payment is only given to beneficiaries if the insured has already passed away. The main objective of a life assurance policy is to offer a means of monetary security to your loved ones after you die. It guarantees financial help through the accumulated amount you have paid in your premium.

There are basically three different types of life assurance policy.

1. Term Life Insurance Policies

This policy might be the cheapest among the three but it is temporary in nature. It has a limited coverage and liability. Once the coverage period expires, the insured may either renew or terminate his policy. Death payments will be given to dependents only if the insured dies within the specified date on his insurance policy. If he survives, then death payments will not be given to his dependents. This type of life assurance policy does not provide build up of cash value.

2. Whole Life Insurance Policies

This life policy is permanent in nature. As long as you keep maintaining timely premium payments, it will provide you assistance for your emergencies. This policy provides build up of cash value.

3. Endowment Policies

This is a settlement where a permanent sum of money or a property is given to an institution for a particular purpose. It runs for a specific period of time and the full value is paid at the end of that period. A good example would be a group of college alumni donating funds to an educational institution.

Now that you know the different type of life assurance policy, you can now choose which one you prefer to avail. Remember to ask insurance company providers to supply you with quotes. Explore your options and choose the best deal for you.


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