Understanding Life Insurance 

» Posted by on Aug 22, 2019 in Insurance Services | 0 comments

Universal life insurance is quite simple but it takes a little time to understand it. There are a lot of concepts to know so that you’ll know exactly what you can expect from your policy. Target premium is one of such concepts that you should understand, and it is mostly applicable to universal life insurances.

Target premium pertains to the maximum fully commissionable premium of life insurance plan. It is usually high to stand constant for up to 20 years. Then it becomes necessary to pay a much higher premium. There are different types of life insurances and these are the following:

1. Term life insurances

Term life insurance is the most basic and affordable type of life insurance. This policy can be purchased for a specific time period. That means if the policyholder dies within the period that is specified in the policy, then the beneficiary will be paid its face value.

2. Permanent life insurances

Permanent life insurance is not as straightforward as term life insurance. Here, the benefit will also be paid to the beneficiaries on the time of the plan holder’s death. This type of life insurance usually has a cash value or a saving element. There are different types of permanent life insurances and these are the ones that are listed below.

3. Whole life insurances

Permanent life insurance is considered whole if it stays constant throughout the life of the policy. The premium may be higher during the start of the insurance but that’s how the plan accumulates a cash value that will be placed in the investment portfolio of the company.

4. Universal life insurances

As discussed previously, universal life insurance is one that covers the plan holder for life while also providing some flexibility. The cash value accumulated by the insurance plan varies the frequency that the premium is paid. This way, the policy will be able to cover the cost of premium completely over time.

5. Variable life insurances

Life insurance is considered a variable if you have control over how the cash value is going to be invested. Variable life insurances are just the same as universal life insurances but it has a higher potential to grow much faster as you can invest your cash in the money market, bonds, and stocks. However, it may also happen that the value of your benefits may be affected in and when the performance of the investment portfolio is not as good as expected.

How to Choose You’re a Life Insurance Plan

There are different ways for you to know which type of life insurance is suitable for you. It all boils down to talking with qualified life insurance and financial planner to help you decide. By doing so, you’ll be able to correctly assess the plan that would suit your needs.

Life insurance is something that everybody needs. Don’t go without it as it is the one that will protect your family in the event that you have to leave this world. A life insurance may not be able to save your life but it will definitely do a lot of good for your family.

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