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Life Insurance Explained
By: Mansi Aggarwal
In the world today money is the most essential necessity of an individual’s
life. It is almost impossible to dwell without money. This is why a person tries
to earn maximum possible during his lifetime to provide a decent living to
himself and his family. But what if the sole earning member in a family dies?
Who will provide financial aid to his family and how? Though there are quite a
few answers to it such as will, leaving a legacy behind etc. But the best and
foremost option meant for the high as well as the low is a life insurance
policy. A life insurance policy as the name suggests not just insures your life
but is also the smartest and the most far-sighted way to secure life of those
whom you love.
Any individual can take a life insurance policy. In case of children, their
parents are supposed to pay the premium. There are policies for different
amount. The premium also varies accordingly. A life insurance policy for $50,000
will be charged higher than one for worth $25,000. But besides these the premium
also depends on many other factors. The topmost is the age of the individual. A
70 year old man will be charge with a higher premium than a 30 year old
individual. Also lesser quantity of risks will be covered in case of the former
in comparison to the latter. Alongwith age the occupation and lifestyle of the
policy taker also matters a lot. A person who throws his life into danger daily
(for example one who is a sky-diver) will have to pay more premium than one
leading a simple life. Moreover an alcoholic, heart patient etc. will find his
life insurance policy to be more expensive than a strong and healthy individual
of the same age.
It is always the choice of the individual which insurance policy to take and
from where. This depends on the needs and aspirations of the individual. for
instance a person who is supposed to be survived by 5-6 successors or
beneficiaries, usually opts for a policy with a good sum of money.
Broadly there are 3 different forms of life insurance policies.
1. Whole life policy- this policy is one where the amount of premium the policy
taker requires to pay does not alter with time. The amount of the premium id
decided once at the time of taking the policy. This type of insurance enables
the policy taker to have some cash-build up during his lifetime that can be
either used during the course of the policy or after his death to increase the
benefit.
2. Term life insurance begins with low premiums initially. the premium amount
increases with the age of the person. since there is no cash build up in this
policy, there are no chances of an increment in death benefit.
3. Variable life policy is akin to the whole life policy i.e. the premium is
fixed once and for all. The only difference here is that in this policy there
should be cash build up as long as the various mutual funds the policy taker has
opted for, do well.
About the Author:
Mansi gupta writes about best life insurance quote. Learn more at
http://www.lowquoter.com/life/ .
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