life insurance: A brief Information

 Life insurance is a contract between the insurance policy holder and the insurer or the insurer, where the insurer promises to pay a sum of money (beneficiaries) to the named beneficiary, in lieu of premiums, on the death of the insured (often the policyholder). Depending on the contract, other events such as terminal illness or critical illness may also initiate payments. The policyholder usually pays premiums, either regularly or as a lump sum. Other expenses, such as funeral expenses, may also be included in benefits. Life policies are legal contracts and the terms of the contract describe the limits of the insured events. To limit the liability of the insurer, payment may be withheld by giving examples of various reasons; Common examples are claims relating to suicide, fraud, war, riot, and civil commotion.

Life-based contracts come in two major categories

Protection policies – designed to provide benefits, typically a lump sum payment, in the event of a specified event. A common form – a protection policy that has been more common in the last years of design is term insurance. Investment Policies – The main objective of these policies is to facilitate the growth of capital by regular or single premium. Common forms (in the U.S.) are whole life, universal life, and variable life policies.

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Who pays for life insurance

The person responsible for paying for the policy is the policy owner, whereas the insured is the person who is insured and after his death that sum assured will be paid. The owner and the insured may or may not be the same person. For example, if one buys a policy on his life, he is both the owner and the insured. But if he takes an insurance policy for his wife or children, then he will be the owner of that insurance and his wife / child for whom he has taken this policy is considered as the insured. The policy owner is the guarantor and will be the person paying for the policy. The insured is a participant in the contract.

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Who gets the benefit of life insurance

The beneficiary receives the policy proceeds on the death of the insured. The owner designates the beneficiary, but the beneficiary is not a party to the policy. The owner can change the beneficiary as long as the policy does not have an irrevocable beneficiary designation. If a policy has an irrevocable beneficiary, any beneficiary change, policy assignment or cash value borrowing will require agreement of the original beneficiary. The policy may apply special exclusions in these situations, such as a suicide clause, whereby the policy becomes void and becomes void if the insured commits suicide within the specified time. may be the basis. The policy face amount is the initial amount that the policy will pay on the death of the life insured or on completion of the policy term, although the actual death benefit may provide more or less than the face amount. The policy matures when the life insured either dies or reaches the specified age (say 100 years old)

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The following types of life insurance:

  • Term Plan – pure risk cover
  • Unit linked insurance plan (ULIP) – Insurance + Investment opportunity
  • Endowment Plan – Insurance + Savings
  • Money Back – Periodic returns with insurance cover
  • Whole Life Insurance – Life coverage to the life assured for whole life Child’s Plan – For fulfilling your
  • child’s life goals like education, marriage, etc.
  • Retirement Plan – Plan your retirement and retire gracefully