Question

Consider the different ways to insure your life; term, variable life, whole life. Which insurances do you think the most appropriate? Are there circumstances that suggest one type of insurance over another? Do any of you have life insurance and if so what type? Are you satisfied with that type of coverage?

Answer 1

There are various options to get one's life insured and the are as follows:

1. Term Life - The fundamental goal is to give hazard cover for a particular timeframe. There is no choice for funds or making benefit from such arrangement. If there should arise an occurrence of death of the safeguarded individual, the pre-settled whole guaranteed sum is paid out to the recipient. Otherwise no claims are paid. Since essentially term life simply gives life cover and on account of this reason premium sum is less expensive contrasted with other different options.

2. Whole Life: It works the same way as term life, but it covers the policy holder for entire life whereas term plan covers for a fixed time period.

3. Endowment policy: Along with the hazard cover, this strategy offers money related reserve funds. So essentially twin advantages – single amount guaranteed if there should arise an occurrence of death amid the strategy term and upon survival, premiums paid are paid in kind notwithstanding returns like bonuses. Whole guaranteed is paid to the candidate as pronounced by the safeguarded while purchasing the strategy. Since it offers higher advantages, the premiums and charges are on a higher side.

4. Money Back: It is like endowment policy arrangement and offers life coverage and capital creation opportunity. Financial specialist gets intermittent installment at pre-settled interims over the span of the approach term. This installment is paid from the segment of the sum guaranteed. If the holder of the policy survives, the rest of the parity of the total guaranteed is paid. In an occasion of death, nominee gets the full amount guaranteed.

I have a life insurance which is an endowment olicy. This will allow me to fulfill my timely goals as and when I progress in my life. I will be able to buy a home, go on a Europe trip and get my children happily married. I am pretty satisfied with my insurance plan as I am able to save up funds to be paid as premium. The premium has also inculcated a habit of savings in my life.