Purchasing a Life Insurance policy should be done as soon as possible. Although each day new ideas and policies are given by the companies, opting for a life Insurance policy shouldn’t be delayed. The reason behind this is the fact that life is short and can leave your side at any time so life insurance shouldn’t be played with. Make the right decision when you have time so that when you go your loved ones will have the right thing to claim.
Common types of Life Insurance policies offered by the life insurance company are: Term Life and Whole of life insurance policies. The least common known type amongst many is variable universal life insurance policies.
Whole of life policies actually combine a life insurance with an investment fund that is built up over time and is held for the benefit of the policy holder. The level of cover and premiums are reviewed at regular intervals and if, in later years, the level of cover cannot be maintained by the premiums being charged then the investment fund can be used to supplement the cost of cover and maintain protection until death.
Whole of life insurance policies are long lasting and thus the longest type of contract. The flexibility and commonly used for protecting of estate from the effect of the inheritance taxed that are charged on death of policy holder.
As the name indicates, term life insurance policy remains valid for some term period. In this policy there is no investment required and the premium charges tend to be very cheaper as compared to whole life insurance policies. The premium money is needed to buy life coverage and when the term policy expires no money will be returned to policy holder of term insurance.
Unlike Whole of life insurance policies, the term life insurance policies are used for the insurance of mortgages which lasts for a given time period which results in easy calculation of the term. This type is generally bought by those families that have budget problem but due to financial constraints are in urgent need of protecting their properties.
The least preferable type, the variable universal life insurance uses the investment factor thus the whole of life and variable universal life insurance policies are similar to each other. These types of insurance policy are flexible and receive premiums in terms of how much and when to receive.
Variable universal life insurance policies are as much a part of an investment portfolio as your insurance coverage. Being insurance policies they benefit from attractive taxation benefits that are peculiar to insurance policies. Being flexible as to how and when they receive premiums, this allows for their use to shelter capital gains that otherwise are taxable within them.
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