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:
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.
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.
Site last updated: 3. March 2021