 |
 |
 |
 |
 |
 |
 |
Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. |
Life Insurance |
What is life insurance? Simply put, life insurance is a way for you to provide financially for your loved ones after you die. It is a contract in which the insurer promises to provide your beneficiaries with a certain amount of money in the event of your death. Whether or not you are eligible for life insurance will depend on factors such as your health and type of employment. If you do qualify, the amount of your premiums—that is payments for the policy— is based on factors such as your age, gender, health and occupation. Types of Life Insurance There are two basic types of life insurance: Term Life Insurance covers you for a period of time—or term—that you choose. Permanent Life Insurance offers a few more variations, and provides a lifetime of coverage. Each has benefits that may be important to you depending on the ifs in your life.. Term Life Insurance: Term life insurance is the least expensive type of coverage, at least initially, and the simplest. Coverage is in effect for a fixed term or period of time—typically 1 to 30 years—and usually can be renewed. The policy pays your beneficiary a fixed amount of money if you die during the term of the policy. The premiums are lowest when you are young and generally increase upon renewal as you age. These policies do not build up a cash value. Permanent Life Insurance: Whole Life, Universal Life and Variable Universal Life Provides protection as well as a cash value. Your premiums remain at a fixed level for the duration of the contract. Over time, the policy builds up cash value on a tax-deferred basis. It also provide for dividends (which are not guaranteed), that can be used to add more coverage, can build a cash-value that you can use to supplement your retirement income or help provide for a child's education—it's your money to use as you need.1 But keep in mind life insurance should not be purchased solely for cash-value accumulation; its primary purpose is protection. Is a flexible life insurance plan. These policies are interest-sensitive and permit you to adjust the death benefit and/or premium payments, within limits, to fit your situation. Your net premium payments are applied to the accumulation fund, which earns interest. The monthly cost of the death benefit and policy administration is deducted from the accumulation fund. As with Whole Life Insurance, the cash value is yours — you may withdraw it or borrow against it at any time.1 Or, you can use your cash value to pay premiums. Universal life rates are subject to change, but the rate will never fall below the minimum rate guaranteed in the contract. May be for you if you want to invest the cash value of your life insurance policy in various funding options that in turn invest in such things as stocks and bonds. You decide how your net policy values are to be invested—and you bear the investment risk. If market performance is poor, your death benefit may decrease, and you may have to pay higher premiums to keep the policy in effect. But your cash value also has the potential to grow more rapidly than with other cash-value policies if the market performs well. Like Universal Life Insurance, above, premiums and death benefits are adjustable within limits. Would you like to know more? |
| .:: ©2007 Superior Trust (florida insurance agent). All rights reserved - florida group benefit insurance::. |