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LIFE INSURANCE

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Friday, 13 July 2007

Life Insurance: used to protect one’s estate and family from a potential loss, by sustaining financial security. a. Term Life-Term life insurance is the most basic kind of life insurance. It provides affordable protection for a pre-defined period of time, so it is often used to serve temporary protection needs. b. Permanent life insurance — including whole life insurance and universal life insurance — is used when protection needs are more long term. There are many kinds of permanent life insurance, each of which has unique features that make it appropriate for certain situations. c. Whole Life- this option accumulates cash value that can be borrowed against tax free. Whole life guarantees level premium payments for life and the face amount to be payable at the time of death. Dividends are usually eligible. d. Variable Life-have the opportunity to achieve higher than usual investments returns but also have risk of low or negative investment returns. e. Universal Life- this option accumulates cash value that can be borrowed against tax free. Guarantees level premium payments for life and the face amount to be payable at the time of death. The two main categories of permanent life insurance are fixed and variable. Fixed life insurance products accumulate cash value at a pre-defined, guaranteed minimum interest rate or guaranteed cash value while variable universal life insurance products are designed to provide an insurance benefit under your policy, but do not guarantee a minimum rate of return. They will fluctuate up and down depending on the performance of the applicable investment divisions.

Last Updated ( Monday, 06 August 2007 )