Types of Insurance: Life Insurance

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Types of Insurance: Life Insurance

By Sorli | January 7, 2009

There are various types of insurance to protect you from all type of risk such as life insurance, auto insurance and fire insurance. All types of insurance including auto insurance aims of helping you to reduce or accommodate financial loss due to occurrence of a disaster.

Therefore, an insurance policy actually is a contract between an insurance company and a consumer party that compensation will be paid if disaster or accident mentioned in the policy do happen. However, compensation only will be made depending on the paid premium.

Life Insurance.

Life Insurance

The purpose of life insurance is to provide financial security to the children and other house dependents who are under a worker liability if he died. Term life insurance provides insurance coverage for a fixed number of years. If a policy holder passed away in the period, his family will get the sum insured. But if the policy holder does not die in the time period set, he will not get anything from the insurance company. The privilege of term insurance is the premium paid is lower compared to other insurances.

For other insurance type such as endowment life insurance, its policy is for a particular time period. The policy holder will receive the sum insured at the end of the fixed-term.

However, if the policy holder passed away before the fixed-term, his family deserved getting payment on the policy. For a whole life insurance policy, policy holder pays premium for lifelong. When the policy holder passed away, his family will receive the insured sum entirely. If the policy holder hands over his policy after 20 or 30 years, before his death like those stated in policy, he will get a certain amount of money back – namely the sum he had paid plus a fractional of the insurance funds investment group profit.

The insurance type that will give benefit the most is a policy that can provide maximum coverage with a minimum cost.

Guide for Buying an Insurance

Make sure your insurance agent is registered with the insurance association of your country.
Read insurance policy from your agent about conditions which included in policy and check the explanation with the insurance association or friends which might has taken the same policy.
Be sure that all benefits that will be acquired are clearly stated in the agreement.

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