Life insurance is important; as it protects your family and lets you leave them a non-taxable amount at the time of death. It is also used to cover your mortgage and your personal loans, such as your car loan. Your individual life insurance follows you when you retire and you are no longer insured by your employer.
Once you understand the importance of taking out a life insurance policy, you need to make the right choice. To do this, you need to ask yourself about your needs and purchase a product that works for your family and insurance premiums that fit your budget.
What are the principal type of life insurance?
Term Insurance is the simplest form of life insurance. It pays if death occurs during the term of the policy, which is usually 5, 10,15,20,25 and 30 years Term.
Term Life insurance is purchased to pay;
- Mortgage or Rent
- Business Expense
- Funeral expense
- Education Funds
- 1-3 years of deceased income
Permanent life insurance is a life insurance policy that covers a policyholder as long as he/she lives. In addition to being a life insurance product, it is also a saving product – a whole life insurance policy accumulates value that you can get, either when you terminate (surrender) the policy or if you decide to borrow against the policy value.
There are two major types of permanent life insurance
- Whole life insurance
- Universal life insurance
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