Different Types of Permanent Life Insurance Options
Life insurance is basically a contract between an insurer and an individual, in which the insurer promises to cover a designated insured sum of cash upfront, with the payment, or acceptance of a policy, by the insured person. The contract may stipulate a fixed premium or term, or may include some provision allowing the insurer to change the premium or the term at any time without penalty. Most life insurance policies also incorporate a provision that requires the insured to pay an additional amount, called a terminal loss amount, if he or she should die during the grace period allowed by the contract. This additional amount, called the terminal loss amount, is the excess, as it is often described, that the insurer must absorb to settle the life insurance claim. Terminal loss provisions are very important to life insurance buyers. You are highly encouraged to choose the No Medical Exam Quotes for the best life insurance options.
If a policyholder should die during the grace period, the premiums paid would then cease. In such cases, the life insurance policyholder has the option of renewing the policy or taking out a new one from another insurance company. Premium payments made on a renewed life insurance policy remain unchanged, regardless of the age of the insured when the renewal is made. Premiums also remain constant for the duration of the insured's life, so the buyer can expect consistent premium payments for the duration of his life.
Insurance policies generally set up two separate protection schemes for beneficiaries. The first scheme is called the named beneficiary. Under this scheme, all of the premium payments and the profit made on the sale of the life insurance policy are paid directly to this beneficiary. In most cases, this is the spouse. A separate financial plan is usually made for children or others designated as a beneficiary. Read more here on the different types of life insurance policies.
Another way of making sure that beneficiaries receive the proceeds from the sale of life insurance policies is through what is known as a universal or whole life insurance plan. Under such plans, both lifetime beneficiaries and permanent beneficiaries are included in the plan. The former is made up of a lump sum that is paid upon death while the latter is distributed according to the wishes of the insured after the end of the insured's life.
Another variation to a whole life policy is the variable universal life insurance policy. With this kind of plan, the premium payment and death benefit are determined according to a percentage of the insured's total income and assets. There is also the option to choose a certain percent or a single percent increase in both the premium and the death benefit. In some cases, an additional savings element may be added to the whole life policy to ensure that extra funds are provided to beneficiaries upon death.
Different companies offer permanent life insurance options to customers. These options vary depending on the level of risk the customer is considered to pose to the company. Customers who are young at age and do not have any dependents can opt for the term permanent policies. On the other hand, those who have grown a family can opt for the whole life policy which has more flexibility. To get a detailed overview of this topic, see here: https://simple.wikipedia.org/wiki/Life_insurance.
