Insurance can be taken out for many things, including personal assets and businesses. Some insurance, such as motor insurance is compulsory, but other policies are arranged through personal choice. Life insurance is often dismissed until an individual goes through a major life change, but by planning for inevitable life events, you can be certain that those that depend on you are looked after when you pass away.
Money paid in to a life insurance policy can either be paid out in one lump sum, or paid out at several stages. Individuals often set up a life insurance policy with the aim to save for a specific future life event, or in order to provide money throughout a certain period of a dependents life.
There are two main life insurance policies that individuals commonly choose from, and the advantages of these will vary, depending on the unique circumstances of the individual.
Term Life Insurance – A term life insurance policy covers a fixed period of time that is set out in a contract. Term life insurance policy will typically last 5, 10 or 25 years, but will only pay if you pass away during the term set out.
Whole Life Policy
A whole life insurance policy will last until an individual decides to cancel it, and will pay out at any stage, as long as the premium payments are kept up to date.
If you work in a particularly risky environment, or take part in extreme sports, it is likely that you will need to pay a higher rate. Many insurers won’t pay out any money if an individual has passed away due to drug or alcohol abuse.
All life insurance policies vary in terms of what is covered, so it is wise to seek advice from professional financial advice services before agreeing to a particular policy.