Life insurance is a kind of insurance policy that provides monetary benefits when the person owning the policy dies. The money then goes to the people identified in the policy. The people who receives the money from a life insurance policy are called beneficiaries. As long as the policy holder has been regular and updated on his premium payments, there should be no issue regarding the pay out from the life insurance policy.
The main reason for people taking out life insurance policies is to make sure that the family members who survive them will have some cash in case the policy holder passes away. This is quite significant for individuals who are the main earners in their families.
Life insurance policies are offered by a plethora of insurance companies, and the basic premise is the same. There are differences in the details, of course. Plan pricing, the amount of benefits, the terms of payments, and so on all vary depending on the state, the insurance company, and the policy holder’s situation.
In general, there are sub-classifications of life insurance policies. Term life insurance policies require little cash layout in the beginning of the policy, but the premiums go up as the insured gets older. However, the benefits will not necessarily increase as the premiums go up.
Unlike term life, whole life insurance has a fixed amount for the premiums, and this amount does not change for the duration of the payment period. Variable life insurance also has fixed premiums, but also offers the additional option of investing part of the premiums in mutual funds, allowing for the cash benefits to go higher.