Different Types of Life Insurance Covers
The essence of an insurance cover is to help protect someone from an unfavorable event whose occurrence is uncertain. The ideas is that the premiums should be used to take the person to the position they were before the event occurred. The event that is covered by life insurance is the death of the insurer. The term life assurance may also be referred to as life assurance. This is because the insurance cover, though does not protect from death, helps to cover the interest of one’s loved ones for the period through which the cover applies to.
Most of the knowledge people have about life insurance is from assumptions they make most of which are not correct. Most people hold an opinion that an insurance cover can only be good if the premiums paid are high, an assumption that may not always be correct. In other cases, people may determine the premiums depending on the amount of premiums which is also incorrect. The approach instead, should be one where the person looks at what is stake that requires to be covered and then choosing policy which best suits that need. This this kind of insight, it would be correct to say that the best cover for one to choose will depend on the individual. It is also important for someone to keep reviewing their cover just to ascertain that they meet their current need as opposed to assuming the cover they took a while ago is still serving them up to now.
There are different life insurance covers which one can take. The most basic insurance cover is the term assurance cover. This insurance, like the name suggests, is one where the insurance lasts for a defined term after which the person needs to renew it. The premiums in this cover are variable and one can decide to pay a lesser premium depending on their financial obligations. With this type of cover, the lesser the amount one pays in premiums, the less the indemnity they will enjoy. The policy covers one’s funeral expenses and debts if one dies within the period covered by the cover.
The other type of insurances the whole life insurance. It is possible to come across the same cover bearing different names such as permanent insurance, variable life insurance. This insurance cover is supposed to cover a person until when they die which is why they are called permanent covers. The premiums that one pays may vary as one gets more obligations which the means that a younger person may lower premiums which increase gradually. With this type of cover, one is also one entitled to receive dividends which one can use to reduce the monthly premiums.