Originally posted on March 9, 2020 @ 8:14 am
BEST LIFE INSURANCE
A life insurance policy is a contract established between an insurance policyholder and an insurer, in which a lump sum of money is paid out to the insurer’s relatives or any other beneficiary in the event of the death of the insurer. The aim of having a life insurance policy is to provide financial security and peace of mind during extremely difficult times. Life insurance policies are not expensive to procure. You can get policies with a starting price of £5 per month. However, the cost of these policies varies according to these factors:
- The type of policy that is taken
- The duration of the policy term
- The insurer’s age
- The amount of coverage that is required
- The insurer’s health
- The lifestyle of the insurer – this includes whether the individual smokes or not
Types of Insurance Policies Available
There are two basic types of life insurance policies which are ideal for different situations. We will list and analyse these policies shortly.
- Level Term Life Insurance
- Decreasing Term Life Insurance
Level Term Life Insurance
This type of insurance term involves the insurance policyholder paying a fixed amount to the beneficiaries of the insurer or assurer, should such a person die. At the start of the policy, the term duration is determined, and the payment remains the same regardless of how far the insurer gets into the term. A typical life insurance range from 10 to 25 years. However, on a broader spectrum, terms can be within five to 50 years.
This term cover is more expensive than the decreasing term life insurance. However, this term is ideal if you want a policy that ensures that your beneficiaries are financially catered for until they can financially take care of themselves.
Decreasing Term Life Insurance
This insurance term is designed to help your beneficiaries to off-set a specific debt such as a mortgage. The insurance policyholder sets a term similar to that of level term cover, but in this case, the pay-out decreases as the insurer go further into the term, showing the size of the debt left. Decreasing term life insurance is also referred to as mortgage life insurance.
With this life insurance, the term duration should be similar to the remaining term of the insurer’s mortgage. As the pay-out reduces over time, the cost of these policies drops, unlike level term policies.
What Areas Do A Life Insurance Policy Cover?
Life insurance policies are geared towards paying out in the event of the insurer’s death. Although all human beings die at some points, not all policies payout. The specifics of your selected plan and its terms and conditions determine whether or not your beneficiaries will receive a payout. Most policies are effective for a certain period of one’s life. This implies that if the insurer dies during the timeframe that is covered in the insurance policy, the person’s family or other beneficiaries will receive a payout based on the amount defined by the policy.
This type of insurance can also be referred to as “term life insurance”. Life Assurance policies payout notwithstanding the time of the insurer’s death; hence, the insurer is being assured a payout.
Having discussed what life insurance is and the types of policies available, it is easy for you to decide which of them is ideal for you and your loved ones. If you would like to know more about life insurance and how you can access one, please visit this link: best life insurance.