Saturday, 22 October 2011

How to Find a Suitable Life Insurance Policy

Life insurance compensates the loss of income due to the death of a person just like other insurances compensate the financial loss of an asset. Through insurance you can secure the financial loss up to a certain extent. You can ensure the financial stability of your family even after your death through life insurance.  Somebody does not like to join a life insurance policy, because the benefit of life insurance is available after the death of the insured.

Need of life insurance

With life insurance, you can secure the financial stability of your family even after your death.

You can protect a mortgaged property through life insurance. If the person who takes loan died before paying off the mortgage loan, the compensation from life insurance is helpful to settle the loan and release the asset from mortgage.

Children of life insured can meet their education expenses from the compensation of life insurance, if the untimely death of their parents happened before completing their studies.

A business firm can protect their business form the death of business partner.

So everybody with any financial responsibility needs a life insurance to compensate their death, financially.

Type of life insurance

In a broad sense there are two types of life insurance.

1. Term life insurance

2. Permanent life insurance

Term life insurance is temporary insurance for a fixed term, says 10 years, 20 years, 30 years etc. and if the life insured is alive till maturity nothing will get back. This is the cheapest form of life insurance and it secures the financial loss due to the death of the insured for the sum assured. Very low premium for high sum assured and the premium vary from person to person as per the age, health status, term of insurance etc, of the insured. Term life insurance is suitable for younger age and those who have dangerous nature of work.

Permanent life insurance is insurance with high premium but provide benefit to the insured at the maturity also. Whole life insurance, universal life insurance, variable universal life insurance etc. are various form of permanent life insurance.

How to select a life insurance policy

If you could not choose a life insurance policy yourself , you can get help of a financial consultant or an insurance consultant. These consultants know various insurance products and its nature and he can easily help you to choose a suitable life insurance policy for you as per your financial and family status.

An insurance broker also can help you that he is aware of so many life insurance products.

All most all countries allow tax exemption for life insurance premium and amount received from life insurance. Learn more about life insurance policies and choose a suitable life insurance for you and your family.

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