life insurance

Two Different Types Of Life Insurance

The average individual does not miss a beat when it relates to insuring their cars or their home. On the other hand, when it comes to their life, that’s a completely different story. For whatever reasons people do not think it’s significant. But believe me when I say it really is. When you die, the salary that you make every month will no longer be available for your family. Would your family be capable of surviving without having your income?

In the majority of cases no. That’s the reason you should not ignore life insurance. Life insurance will give your family financial protection after you pass on. But before you rush out to buy a life insurance policy, allow me to first explain a couple of different kinds you should know about.

Term life insurance is an extremely popular type of Pioneer life insurance. It is the simplest and inexpensive form of life insurance Cebu you can find. With term insurance you will have insurance for a specific length of time. If you die during that time the death benefit will be paid to your named beneficiary. There are two kinds of term life insurance you need to know about.

Annual renewable term and level premium term. With an annual renewable term your payments will be scheduled so that only the real cost of the insurance is covered. Because you are only getting charged for one year of life insurance each time, the premium will increase each year.

The death benefit will continue to be level for the life of the policy. But as you become older, your premium will increase simply because you become much more of a risk with every passing year. The majority of people just use this type of term insurance for short term insurance requirements.

The second type of term life insurance is level premium. For longer insurance needs this is the way you want to go. With this kind of term insurance your premium will be inflated to cover more than simply the cost of insurance. The excess you pay will be invested into the insurance providers standard account. Consequently you will be in a position to pay a level premium for the life of your contract.

Universal is one more extremely popular type of life insurance. A universal insurance policy is a mixture of an annual renewal term and savings and investment accounts. You will deposit funds into a cash value account that is just like a savings account. It is generally known as the pot of money account in the insurance industry.

Every month your premium and any other charges that are due will be taken from that account. Any leftover money will be invested in a mutual fund, fixed rate account or other special account used by the insurer as a proprietary equity-indexing investment technique. This procedure will carry on until there is no longer money in the account.

With a universal life insurance policy you can alter the premium and death benefit at any time. This kind of flexibility is one of the primary reasons people opt for universal life insurance policies.