It is time to stop thinking about life’s uncertainties and start embracing long-term predictability. People invest money in mutual funds, property, land etc. but investing in an insurance policy can also be a great way to protect your family members, even after your departure. Whether you are planning to purchase a policy or just looking for quotes, it is important to understand the types of policies available so that you can select the one that meets your requirements. There are two general types of insurance policies – temporary and permanent.
It is a type of insurance policy that provides coverage for a limited period, or specified ‘term’ of years. If the insured dies during the specified time, then the death benefit will be paid. Factors to consider while opting for term policy –
– Term of the policy
– Premium amount
– Death benefit
Permanent life insurance provides insurance for your entire life (in most cases). As long as your premiums are paid, your beneficiaries will receive the proceeds, no matter when you die. The main types of permanent insurance are variable, whole and universal. Factors to consider while opting for a permanent policy –
– Tax advantages
– Cash Value
Before buying a policy, it is important to categorize your insurance needs. Term insurance is appropriate for an average individual looking to insure themselves against unforeseen events. On the other hand, permanent life insurance can be beneficial for someone who wants both living and after death benefits.