LIFE INSURANCE
One of the most severe causes of financial loss to a family is the premature death of a family member, especially the primary wage earner. Life insurance can greatly reduce the adverse financial consequences of such premature death.
Although there are many variations of life insurance, the three basic types are: -
· Whole life insurance
· Term Insurance
· Universal life insurance
Whole life insurance provides lifetime protection (to age 100). Whole life insurance policies accrue cash value and have premiums that remain unchanged during insured’s lifetime.
Cash Value is a savings fund that accumulates in a whole life insurance policy and that the policy holder can access in several ways, including borrowing, purchasing paid-up life insurance, and surrendering the policy in exchange for the cash value.
Term Insurance is a type of life insurance that provides temporary protection (for a certain period) with no cash value.
Universal life insurance combines life insurance protection with savings. A universal life insurance policy is a flexible premium policy that separates the protection, savings and expense components.
FUNDAMENTALS OF INSURANCE