Having invested first or regular payment in endowment life insurance, most insurers hope to receive an investment income from their investments. As a rule, people compare the profitability of this investment instrument with a bank deposit but forget the main thing for which they purchase a life insurance policy. After all, the main task is to take care of the future of your family, relatives, and friends in case of an unforeseen event.
The main mistake of the insured investor is to think first about profit and preservation of earned funds but not about the life and fate of loved ones. If you need earnings, then you should visit a bank or the stock market. Life insurance is a long-term investment with your protection and a guarantee of helping your relatives. Either way, this is not your income.
Whatever one may say, from a legal point of view, the policyholder is to blame for everything without understanding the details and trusting the insurance consultant blindly signed the contract. However, even if you read the contracts and have disputable questions, you still cannot change anything in these documents, except for the payment schedule and insurance payments.
Why Do You Need Life Insurance?
Each person makes plans for the future, sets goals, and achieves them. Many things in our life require certain financial costs. Money is needed in everyday life: for groceries, large purchases. It improves the quality of life, protects us and our children. Even if you are not involved in extreme sports or do not work in hazardous industries, having insured your life, you can save up for planned large expenses, such as a mortgage, buying a car, or provide an increase in your pension. Life insurance becomes a guarantee that the family will not be left without material support in a difficult life situation. Even consider taking a 500-Dollar Loan on the Same Day Direct Deposit - DirectLoanTransfer and acquire basic insurance.
What is Term Life Insurance?
Term life insurance is a variety of life coverage. Accident benefit is provided to the customer's beneficiary. Such compensation is repaid in case of death within a specific time. Such coverage affords premiums as well.
Term life insurance is provided when a customer buys a particular coverage amount for a certain period at a fixed cost. In case a customer lives longer than the period indicated in the contract, then the current plan expires. Otherwise, a customer has to replenish it. If you die before the fixed deadline, then the policy promises to repay 100% of the whole coverage. It is classified as a "death benefit".
Buying term life insurance, consider the following:
● Determine a length of time that matches the period over which you will pay your bills, and the period you need your coverage to be lasting.
● Estimate present and future financial demands to get the sum your family need if you can provide them;
● Your family needs to finish it due to the moment it terminates. You have to pay for your home having additional funds to support yourself and your entire family.
Features of Term Life Insurance
● Provides death and life benefits;
● Repays benefits in case of your death while the policy is still in force;
● Tariffs are insured level and are fixed for the duration of the policy;
● The most convenient and reasonable insurance option to get;
● It can be purchased for a particular period (30 years);
● A beneficiary pays benefits as long as you live;
● With time, the acquisition gets rather pricey particularly after 50 years old;
● The insurance term can be extended if customers need to renew their own coverage.
Pros and Cons of Term Life Insurance
Pros
● The validity period is simple and the rules are easy to follow and the policy is easy to buy;
● The term insurance is the most affordable option of the insurance coverage amount;
● A customer can terminate a policy at any time as it terminates without losing value.
Cons
● Coverage expires at the end of the term;
● It is not possible to renew the policy;
● A customer has to purchase another life insurance as it terminates.
Whole Life Insurance Significance
The whole life insurance has the peculiarity to cover each customer for the period of their entire life. In addition, the whole life insurance ensures the death benefits to be given to the beneficiary as long as the premiums are repaid. The current politics creates its monetary value. Such value is an investment part that increases gradually excluding taxes. This suggests that customers should not pay taxes while they accumulate.
You may borrow against cash in the account or return the policy funds in exchange for cash. Nevertheless, if you do not pay the policy loans with an interest, then you will decrease your death benefit. When you cancel your refund policy, you lose your valid coverage. While term life insurance is much more complex unlike a term life insurance policy, whole life is the pure form of changeless insurance.
Whole Life Insurance Policy Features
● Covers customers for the entire life;
● Grants with death benefits;
● Offers monetary value that increases during the time of the policy;
● Obtained with no medical examination being more expensive;
● Takes about 12 years or even more to earn a proper monetary value;
● Can be a good option for property planning;
● The monetary value depends on how much the chargeback on investment is;
● Pricey unlike term life insurance.
Pros and Cons of Whole Life Insurance
Pros
● Valid for life policy;
● Works as a coercive economy;
● The monetary value of the policy increases over a certain period.
Cons
● Whole life insurance is up to 6 times expensive in comparison to term insurance;
● People frequently drop out of insurance earlier than required because of high costs;
● Much more complex option, unlike term life insurance.
Term life insurance is effective only during a particular term. Whole life insurance lasts the whole life. Thus, if you outlast your policy, then you can not be insured. You have to replenish your policy. As the whole life policy is valid for life, it guarantees payment. Moreover, the whole life policy offers higher premiums, unlike term life insurance.
How to Issue an ILI?
The ILI program itself can be purchased either from an insurance company or from a credit institution that is an agent of the insurance company.
In any case, when choosing an insurance company, you need to pay attention to the following points:
1. Founders and experience in the market;
2. Who is the reinsurance company;
3. The breadth of representation in the regions (whether there are offices in your city, or you need to contact the hotline and communicate by mail - regular or e-mail);
4. Market place (share) and reliability ratings;
5. Number of clients and contracts;
6. Assets and who is the management company;
7. History of payments to its clients (main risks: death for any reason, disability, an initial diagnosis of deadly diseases, etc.).
8. Judicial practice;
9. Recognitions and awards;
10. Official website (availability);
11. Licenses for the right to carry out voluntary life insurance and voluntary personal insurance;
12. Who is the auditor of the insurance company;
13. Regulation of activities by the Central Bank (whether the company is included in the list of systemically important companies);
14. Information about the historical profitability under the contracts of the NSJ and ILI.
When registering a product, clients fill out an application. They are issued a policy and a standard contract. The main conditions of insurance for a particular client are prescribed in the policy (or in the specification for the policy).
Payment can be made in cash (pay by receipt) or non-cash (by debiting money from a bank card using a terminal, transferring a payment order from a current account, or making a payment on your own directly on the website of the insurance company).
The protection begins to operate from 00.00 o'clock on the day following the day of payment and issue of the policy. In different insurance companies, this moment acts in different ways (if the policy is issued after some time, after payment, and before the issuance of the policy, only part of the protective parameters are valid).
When buying a policy with an installment payment, contributions must be made on time. If clients are unable to further pay premiums on the insurance policy but would like to continue to cooperate with the insurance company, they are offered several options.
First, they need to fill out an application for transferring the policy to the status of paid. In this case, the insurance coverage will continue to operate only for a limited number of risks, for example, "death for any reason", and investment income will be charged only on reserves the amount accumulated by that time.
Secondly, the client can take advantage of the "financial holidays" which will allow not to make contributions for a period of one to three years while maintaining the full amount of insurance coverage (that is, receive an exemption from paying the insurance premium).
Thirdly, the client can reduce the amount of the premium by reducing the package of additional risks or reducing the insurance period.
It is possible to change the terms of the policy (term, amount, frequency of payment) on each anniversary of the policy. Also, the insurance company usually offers customers to connect additional services such as indexation of investments in order to protect against inflation, or additional protection programs (injuries, hospitalization, surgical interventions, etc.). Upon agreement with the new offer, the client simply pays a new amount, and the new conditions take effect.
In its pure form, life insurance implies a single insured event as a death. In this case, the insured makes one installment or pays them regularly. Everything depends on the contract. When an insured event occurs, relatives receive the money.
Life insurance often becomes the basis for the so-called mixed insurance in which you receive a payment even if you are sick or injured. In this case, no savings are made.
