Do you know what a life insurance cover is? It is basically an agreement that you sign up with an insurance company. What you get in exchange for your regular premium payments is a lump sum amount that comes from the insurance company, called as the death benefit, that gets paid to the beneficiaries as the insured passes away.
Generally, a life insurance cover will be selected based on the needs and objectives of the policy owner. Term life insurance cover offers seniors with protection over a set period, whereas the permanent insurance cover, which is also known as the universal life insurance cover, offers lifetime coverage. It is best to take into account that the death benefits from all these types of life insurance payments are usually income tax-free.
- Term Life Insurance Cover
This type of insurance cover offers financial cover over a certain period, such as 10 or even 20 years. While you have opted for a conventional term insurance policy, the premium payments will stay the same over the coverage period that you have chosen. Once the period is completed, the policy perhaps offers continued cover, which will be at a higher premium payment rate. A term life insurance cover will generally be less pricey than the permanent life insurance.
The financial needs of the family can be easily met with the help of term life lump-sum payments which can be beneficial for replacing any lost prospective income source for someone in their working times. It can also offer the beneficiaries with a safety net and makes sure that the financial objectives of the family are met properly.
- Universal Life Insurance
This is a permanent type of life insurance that is made to offer a lifetime cover. Unlike the whole life cover, universal policies tend to be flexible and perhaps allow you to rise up or even lower your premiums or your cover amount during your lifetime. Due to lifetime cover, universal life cover also has higher premiums compared to the term life.
Universal cover is generally used with a technique for flexible estate planning for the preservation of wealth that will be later transferred to the beneficiaries. One other regular use would be the feature for long-term income replacement, where the needs will extend beyond the working years. Some of the universal insurance products are designed to mainly focus on offering the building of cash value and death benefit cover, whereas others just focus on guaranteed death benefits.
- Permanent Life Insurance Cover
The whole life is more like a permanent life insurance cover that is designed to offer lifetime coverage. Lifetime cover will means that the whole life will be having a higher payment on premiums that are paid over term life. The policy premium payments are generally fixed. Unlike the term life, the whole life cover has a cash value, which works more like savings that will accumulate over the period of time with a tax-deferred featured.
It is crucial to opt for a viable type of insurance cover that is not only affordable but also worth it, considering it as a long-term investment. You can always check with the best insurance service provider such as LifeNet Insurance Solutions and learn more about the policies mentioned above so that you can find the best one as per your needs and financial requirements.