The word insurance is confusing for many. Just by thinking about insurance brings about many thoughts such as lots of policies, quotes, brokers and so on. It is really a daunting task even to attempt to purchase one life insurance which satisfies all your requirements, especially when all the brokers and entire websites have many options. But one thing is sure, before even approaching any broker or a agent or any comparison websites one needs to know what insurance really is especially life insurance.
The first thing to know about a life insurance is that what kind of cover any policy provides. There are basically many type of life insurance policy available. These are Term Life insurance, Whole life insurance, Universal life insurance, and Variable universal life insurance and so on. These are a few most common ones that are liked by the customers. Again between all these Term life insurance and Whole life insurance grabs the most attention. The basic difference between the two is that Term life insurance is for a fixed term while Whole life insurance is for your whole life.
Term life insurance is by far the cheapest of all the insurance products available. In this insurance policy a person has to declare all his liabilities and what kind of insurance cover he would like to go for. Once the list is completed then the premium is decided, this is done taking into account your age and the liabilities both. And then you have to pay the premium till the end of the term of your policy. The day the term of your insurance is over, you have to either renew the term or the policy gets lapsed. One thing that needs to be taken care of is that renewing the term will have its own side effects. The premium will increase as per your new age and new liabilities. This is one of the biggest back drop of this insurance policy.
Whole life insurance, once taken gives you cover for your entire life which is very good as this gives you peace of mind that you are insured and ready for any untoward happening. This insurance policy gives you cover for any liability which you disclose at the time of taking this insurance policy. This means that if you disclose your entire family and all the liabilities such as a home mortgage or a car loan and other personal and credit cards debts, your family will receive the protection against all these liabilities. Apart from these liabilities, whole life insurance also takes care of your funeral cost which is very high now days. The biggest disadvantage of this kind of insurance policy is that, this insurance policy does not takes into account any other liabilities other then the ones mentioned at the time of purchase of the policy. This means that if you now at the age of 60 years with many children and grandchildren with multiple houses and cars, your insurance policy will take into consideration only those things which were there at the time of taking the policy.
No matter which ever life insurance policy you take, always make sure that you take complete knowledge of it. This is very important so that you can plan your future and help your loved ones with the maximum benefits from the insurance.
