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Life Insurance: Helps to Stay Away from Worries

By Elissa Joyce Subscribe to RSS | November 29th 2011 | Views:

The life insurance policy is very essential to face any uncertain situations that may arise in future. Your family members get some valuable security after your death. They can get a living even in the absence of any other income. This policy takes care of all your worries and you can live a stress free life. The amount you get after the policy period end in case of term life policy makes it a worthy investment. Let’s know more about this topic.

The different types of life insurance mainly come under two categories. These are term as well as permanent life insurance. These types underlie few more kinds that give more options to people. You should properly know all the types before making a final decision.

Insurance policies come in different categories. There are some parameters to define and classify them. These include years, premium amount, benefits covered as well as other regulations that control the policy. These policies might vary depending on the company you choose. But the extent variance is quite minimal. None of these would contradict the principles and guidelines of the life insurance contract. Let’s look deeper into the two main classifications - permanent as well as term insurance.

Term Life Insurance:

This type of policy involves the insured person paying a fixed sum for a certain time period. This sum stays constant. You should note that the premium charged here is quite nominal. The holders of policy usually survive even after the expiry till they get affected due to some serious disease or accident. People find this policy quite affordable as the cost is low. Due to this lots of people choose it conveniently.

After the expiry of policy the insured can surely renew it. However, he would need to pay revised premium rates. Sometimes these could be quite high. This is the shortcoming related to this policy. But looking overall it is a smart choice. This economical option is particularly popular among salaried youth persons. The whole term insurance policy comes under this kind of insurance only. You might be wondering what actually this is. In the whole term insurance a person needs to pay some fixed amount of money throughout his complete life.

The term life insurance has different categories under it. These are:

1. Group Term Life Insurance:

This kind of insurance is taken by employers for their employees. These employers might pay the premium through their kitty or deduct certain amount from the salaries of employees. This completely matters on which company you work in. This policy offers fantastic benefits. However, you can not depend on it completely for meeting all your needs. The popularity of it is increasing rapidly in developing countries.

2. Level term Life Insurance:

This insurance needs you to choose a certain time and then pay premiums for this selected time period. The policy would automatically get mature when the selected period is reached. After you choose the term like 5, 7, or 10 years it can not be revoked. This insurance is perfect for people who do not want financial plans for long term.

Permanent insurance:

It is a kind of expensive policy. You should note that this policy cannot be stopped for any occasion till you regularly pay the premiums and don't want to make an end to the policy. Here you pay the premiums for indefinite time period despite the fact that they might exceed the amount your dependents get after your death.

This surplus would get deposited by company in a different account. They would provide higher returns in case the company does well. The profits share is dispatched periodically to you. You can raise loans out of these funds. You can accumulate them in an account. People who choose to end a policy would be paid back with surrender value. In case the insurer wants to retain profits obtained through his investment then he would not need to pay the income tax for this amount.

Analyze your options properly before making a choice regarding any American general life insurance company. This is significant to get the best possible deal that would help in a long run.

Elissa Joyce - About Author:
The article focuses on the different types of life insurance that are available to people. The different aspects of term and permanent American general life insurance company are covered in detail.

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