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Financial planning is a very critical strategy that helps individuals protect themselves from unforeseen perils, catastrophe...

Financial planning is a very critical strategy that helps individuals protect themselves from unforeseen perils, catastrophe and even when one leaves the workforce (retirement). Discuss the concept of financial planning. What is the individual hoping to protect specifically? How does life insurance create that remedy? What are differences between the different life insurance products: term; whole; universal life and annuities?

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Financial Planning- It is a process of managing your personal finances in order to achieve your financial committments, goals, dreams and unforeseen perils. It is both long term and short term to achieve the long term and short term goals, dreams and committments. Through financial planning an individual is hoping to protect his/her financial committments.

A Life insurance plan is a contingency plan which protects your family in your unfortunate life events like early death, permanent disability and illness etc. It provides the monthly income to your family in the case of unfortunate life events.

Whole Life insurance is the insurance which covers your entire life. It provides cover till the time you die. The premium for whole life insurance is more than the Universal life and annuity as the premiums build over time, and if the premiums are not toucher the final cash value will be much more than any other insurance type.

Universal life insurance is same as the whole life insurance where the coverage is permanent and you build the final cash value of the insurance same as in case of whole life insurance. The only difference when compared to the whole life insurance is that the premium amount can be paid as per your wish and the premium amounts also depends on your wish. The offer flexibility when compared with the whole life insurance.

An Annuity is a series of payments made at fixed intervals by the purchaser till the time the purchaser is alive. A life annuity is sold by life insurance companies. In case of the death of the purchaser before the fixed time, the life insurance companies take the burden of paying the balance premiums on behalf of the purchaser and the benefit of the insurance policy will be provided to the nominee.

jeff jeffy answered 2 years ago
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