LIFE ASSURANCE POLICIES: TERM AND WHOLE LIFE

2007-03-08 10:33:40

( Insurance )



Life assurance is types of life insurance assuring benefits throughout the life of the policy holder. Insurance becomes an assurance when you insure your life so that in the event that you die or become disabled your family is assured of payment. Life assurance policies can either be bought against the principal’s death or disability.

Life assurance policies can also be bought for protection on the risk of losing your life or for investment reasons. Whole life and term life assurance policies are the main types of policies designed to protect you and your family for the risk of losing your life or getting disabled.

Whole Life Assurance Policies

Whole life assurance policies pay you in the event that you become disabled or die. It will cover to pay you while you are disabled until you die as long as you continue paying the premiums required in the policy. Premiums can be structured for certain periods usually at an average of twenty five years. The structure of premiums might be increased when there are many claims experienced by life assurance companies.

Term Assurance Policies

Term assurance policies cover death or disability for a specified period only. The insurance company pays the benefits of the policy when the insured dies or become disabled within the term stipulated in the policy. However, you will lose the money that you have invested in the policy when it expired without any claim at all. The premiums for term assurance policies are mostly guaranteed.

Universal Life Assurance Policies

Universal life assurance policies guarantee risk assurance on your life as well as an investment build up. It can either be a whole life or term life assurance or a combination of the two. A predetermined cash value is offered in the investment component of the policy. A higher percentage of your premium goes to the risk component of the policy while a lower percentage is put in its investment portion as the insured ages.

Choosing which assurance policies works for you needs careful financial analysis on your need for risk assurance and investment. Whatever policy you choose you will surely benefit from it in the long run.


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