Life Insurance Information

Life Insurance Information: The Basics

Because of the uncertainties that life may bring, a lot of people are looking at insurance as a means of security. But whilst more people are increasingly becoming interested in this type of protection, sometimes the volume of life insurance information available can be overwhelming.

Major Types of Life Insurance

A term life insurance policy pays out an amount of money to your beneficiary should you die within the agreed period of time. If you survive, you receive no payout. The time period within which you would like to be covered depends on your preference – it can be anywhere between five to 30 years.

Whole life insurance is decidedly more expensive than term insurance mainly because you get dual benefits. Upon your demise, you get a death benefit plus a cash value. In whole life insurance, a portion of your monthly payments is devoted to investments so that if these investments do well, your cash value benefit can potentially grow to a huge amount.

Although there are numerous other types of insurance policies, when it comes to life insurance information, these two are what you need to be familiar with for the time being. Should your situation require a more tailored approach, an independent advisor can discuss other options with you.

Terminology

Life insurance is a subject replete with jargon which turns most people away. Following is an explanation of a few important terms so you’re not at a complete loss once you’re ready to speak with an insurance representative.

Coverage is the length of time that you want to be protected for. Once you die or become terminally ill, you receive an assured sum, which is the money that is paid out to your beneficiaries. A beneficiary is the person to whom the benefits are paid out. This is usually your spouse but it can also be your children or a close relative.

Premiums are the monthly payments that you give your insurance provider in exchange for the protection that your policy provides.

Other Important Facts

Other essential life insurance information that you ought to know are those concerning critical illness and terminal illness covers. You do have the option of including critical illness cover in a whole life insurance policy. Critical illness insurance pays out a sum should you be diagnosed with a serious condition such as cancer or stroke. Terminal illness cover on the other hand, pays out a sum of money should you be found fatally ill, meaning you are about to die within 12 months.