Life insurance is not a new term. It’s in the Indian market for the past so many years. Privatization promoted it more. So, today most of us can nod their heads when asked if they have heard the name life insurance; but their won’t be many who would be able to explain what life insurance actually means. Ask them, do they know what kind of insurance policies are found in the market. Let me give you a brief idea about it:
The first kinds are known as variable life insurance policies. With adjustable premiums or level coverage, these are best for the people whose income varies. These are typically good for business people who are habitual of loss and profit. These are also suitable for long term obligations and those willing to assume higher risks for sudden and drastic reduction in benefits.
The second kind are single premium or whole life insurance policies. These are level policies with fixed premiums, providing level coverage and subsequent returns. In this kind of policy cash value generally increases with the increase in profit margin of the insurance company. This kind of policy is generally good for those who can invest a large amount of money – say Rs 30,000 – 50,000/- minimum in one slot.
The third kind are known as level term polices. These come with predecided fixed term or periods of insurance like 5, 10, 15, 20… years. In this the sum assured and benefits are generally paid on the death of the insurer. These kind of policies are generally used for funding buy – sell agreements and key man insurance. It is also taken by people involved in high risk jobs like aviation, skiing and army personnel.
The fourth kind is known as decreasing term insurance policies. These are best suited for financial obligations which reduce with time such as mortgages.
The fifth and the last category of life insurance are known as annual renewable term policies. In this the premium amount increases with the increasing term of the policy providing level coverage. These are good wherein the financial obligations remain limited or less for a short duration of time. Child policies are the best example in this category.
Hopefully, this has given you a better understanding of what kind of insurance are generally sold in the market. By now you must have got a fair idea of insurance. This must help you in taking the decision for taking a policy. To have a better understanding of Life Insurance, log on to the various insurance websites, call on the insurance advisor and choose the one which suits you best.
The first kinds are known as variable life insurance policies. With adjustable premiums or level coverage, these are best for the people whose income varies. These are typically good for business people who are habitual of loss and profit. These are also suitable for long term obligations and those willing to assume higher risks for sudden and drastic reduction in benefits.
The second kind are single premium or whole life insurance policies. These are level policies with fixed premiums, providing level coverage and subsequent returns. In this kind of policy cash value generally increases with the increase in profit margin of the insurance company. This kind of policy is generally good for those who can invest a large amount of money – say Rs 30,000 – 50,000/- minimum in one slot.
The third kind are known as level term polices. These come with predecided fixed term or periods of insurance like 5, 10, 15, 20… years. In this the sum assured and benefits are generally paid on the death of the insurer. These kind of policies are generally used for funding buy – sell agreements and key man insurance. It is also taken by people involved in high risk jobs like aviation, skiing and army personnel.
The fourth kind is known as decreasing term insurance policies. These are best suited for financial obligations which reduce with time such as mortgages.
The fifth and the last category of life insurance are known as annual renewable term policies. In this the premium amount increases with the increasing term of the policy providing level coverage. These are good wherein the financial obligations remain limited or less for a short duration of time. Child policies are the best example in this category.
Hopefully, this has given you a better understanding of what kind of insurance are generally sold in the market. By now you must have got a fair idea of insurance. This must help you in taking the decision for taking a policy. To have a better understanding of Life Insurance, log on to the various insurance websites, call on the insurance advisor and choose the one which suits you best.
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