Life insurance is a very common business these days. Whether you are a common person or an insurance agent, almost every second person is establishing connection with the insurance industry. Not many years ago, life insurance was considered to be an idle investment that was done only by the rich people but now the ideas have changed. Due to increasing uncertainty of life and death, almost every person is showing interest in getting a life insurance for himself. Life insurance is being termed as the only shield that provides protection to your family if God forbid, anything happens to you. But still if you are confused that how does life insurance work then below mentioned details are going to answer most of your life insurance queries.
Hidden facts about life insurance:
If currently you are planning to get a life insurance plan for yourself but are confused about what type of life insurance plan you should go for then at first you must consider the type of life insurance you want. Generally there are three types of life insurance plans available in the market.
- Whole life insurance
- Term life insurance
- Universal life insurance
The first type of life insurance i.e. whole life insurance provides the coverage for the term of entire life. You have to pay the required premium and if God forbid, something happens to you then your family is going to receive the insured amount. Whole life insurance is an expensive investment in comparison to term life insurance. Whole life insurance not only possesses the protective features of a life insurance but it also acts as a reliable investment resource from which you can easily withdraw the sum you have paid, whenever you want it. If you are opting for the whole life insurance just for the sake of investment then you need to keep in mind that the rate of return will be lesser in comparison to the other forms of investments.
Term life insurance is the simplest form of life insurance as it will pay the death benefits if the insured person dies within the specified duration of the life insurance plan. Term life insurance plans are available in different term durations. If you have a double-minded feeling about investing in a life insurance then you can opt for the term life insurance with the lowest time duration such as five years. If by the end of the term, you are not satisfied then you can call it off. But if you want to continue then you can easily renew your insurance plan for the new term.
Universal life insurance is the life time insurance plan with flexible premiums. Short-termed interest rates are analyzed in order to determine the cash value of universal life insurance plan.
Ifs and Buts of life insurance:
Most of the people get doubtful while searching for a suitable life insurance plan if they have a pre-existing medical condition. There are also some people who decide at very late age to get a life insurance plan. You must keep it in mind that getting a life insurance with a pre-existing medical condition or at late age is not an easy task but at the same time its not impossible. In both of the cases you will have to pay high premium rates for the life insurance plan as the company will have to bear high risk in offering you the insurance plan.