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Life Insurance Overview -
What Suits You The Best?

Different types of life insurance policies

Life insurance is a type of insurance policy that provides financial security and peace of mind for you, your family and dependants. It is based on the simple principle that should you die during the term of the life insurance policy, the person(s) named in the insurance policy will receive a lump sum or series of payments for the insured amount.

If you have a mortgage and/or are the main income producer in the family, a life insurance policy will ensure your family's future is secure as the payment can be configured to pay off all outstanding debts and provide a substantial income for the ones that you leave behind.

Choose best life insurance policy for your family
Securing your family's future should also include an appropriate life insurance policy for each member of your family

So, what does life insurance cover? Life insurance policies can and do vary from one insurer to another. But overall, the costs covered should include:

  • Income
  • Final expenses including burial costs
  • Children expenses including fees
  • The insurance company considers some factors to determine the premium to charge.
  • They include: age, gender, medical condition, hobbies and occupation.

Types Of Life Insurance Policies

Different families have their own unique needs and priorities and it's due to these needs that we have varieties of life insurance covers. Family situation also determines the insurance policy you need.

Whole Life Policy

The premiums stay the same until the death of an individual. Cash saving is made but one has no control on how the cash is invested. It offers both death benefit and cash value. The policy is guaranteed renewable thus no need to renew. Premiums in a whole life policy generally are guaranteed for the lifetime of the policy.

Term Life Insurance

Term life policies are typically cheaper and less complicated compared to whole life policies. Term life policies are of two types: annual renewable term and level term:

» Annual renewable term basically implies that the premium adjusts each year based on the age when you renew your policy.

» Level term is a policy that is sold with term periods that appreciates with five more years. While some level term policies guarantee the premium won't change, other policies only guarantee that the premium can't change for a few years even though the term may last longer.

Universal Life Insurance

Universal life insurance gives one a chance to choose the duration of coverage and the cash value that may be raised. So long as you deposit and stay longer without withdrawing, the interest rate doesn't change. This life policy allows you to either lower or increase the amount you pay for the policy. Any adjustment you make affects one or both of the other areas.

Life insurance gives you peace of mind
Your life insurance policy gives your family a peace of mind should something happen to you, as well as provide a sense of financial security. (Pixabay.com)

Individual vs. Group Policies

Individual life insurance is where an individual buys his/her own cover. This covers one or more people in a single policy.

Group life insurance is bought by employers, governmental entities and organizations such as schools, churches, banks, security firms and Non-Governmental Parastatals.

What You Should Know

» Prompt Payment Of Death Benefits

Insurance companies should pay the proceeds of the life insurance policy to the beneficiary within two months after receiving proof of death and verifying the beneficiary.

» Missing A Premium Payment

Most policies have a grace period of 31 days after your premium gets mature, during which you may pay the premium with no interest charged and still have coverage.

» If Your Policy Lapses

To return to function a lapsed policy, the company may need you to pay some or the entire accrued premium with interest.

It is always advisable to have a life insurance; it helps you during your life and takes care of your family after your death. A life insurance is a healthy investment to secure loved ones.

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