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How to decide on a policy from the various life insurance types available?

Sunday, March 25th, 2012

The reason anyone gets a life insurance policy is for the very simple need of providing for the family in case of death. Especially in cases where the death is unexpected or if it occurs post retirement then the sum received from the policy will help the family to manage for some time.  Investing in a good life insurance policy for a long term will also help with tax rebates. There are many agencies that represent multiple insurance companies as well as insurance companies that one can buy a policy directly from. The first step is deciding from the life insurance policies that are available. There are 2 main life insurance types available that are Term Life insurance policy and a Permanent Life insurance policy. Both of these have their benefits and it is up to the individual to choose the best policy for his requirement.

A term life insurance policy is for a fixed term. While this is a renewable policy it can prove to be more expensive to renew for e.g. if the policy older is nearing retirement. The insurance cover is applicable for the term of the policy and is meant to satisfy short term requirements. While these can be converted to a further term there could be a requirement for a medical check or for a resubmission of some paperwork. The premiums for this kind of policy are lower and is one of the reasons why this is a popular policy especially for those who have financial constraints or are just starting out with their careers.

A permanent life insurance lasts for the whole life of the policy holder. There is a par whole life coverage that gives dividends to the policy holder as a partial return of the premium paid for investment growth and the coverage. These dividends keep changing annually. The other option is the non par whole life insurance where the sum assured is guaranteed.

There are also other life insurance types like a Universal life insurance policy that are beneficial for those people who have pension contributions and pay taxes on investment income with the capability of an investment income for at least  10 years. A life insurance policy is very important for the well being of your family and is a worthy long term investment. There are many options to safely buy policies through genuine agencies and online as well.


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