KINDS OF LIFE INSURANCE POLICIES

KINDS OF LIFE INSURANCE POLICIES...

The principal types of life insurance policies which are ordinarily issued are as under:
(1) Whole life Policy. The whole life policy runs for the whole term of thelife of the insured, The insured pays premium throughout his life time. It is paid tothe beneficiary when the insured dies. There are three types of whole life policies(a) Straight Life (b) Limited Payment Life and (c) Single Premium Life.
Straight Life. Straight life is the policy in which the premiums arepayable every year as long as the insured lives in this world.
Limited payment life. If the insured is to pay the premium for a statednumber of years, the insurance is called limited payment life.
Single premium life. Single premium life involves only one premiumpayment by the insured.
Endowment Life Policy. This policy runs for a particular period or uptoa specified age. The payment of the stated money becomes payable at the end ofthe period mentioned in the policy. In case the insured dies before the policymatures, the payment of stated sum of money in the policy, becomes payable tothe beneficiary. However, the premium have to be paid till the time of maturity.The advantage of this policy is that it combines saving for old age and also givesprotection to the insured family in the event of premature death.
Term Life Policy. Term policy as the name say maximum for ten yearsmaximum signifies is an insurance policy for a specified period of time saymaximum for ten years maximum. If the assured person dies before a certaindate or age, the insurance company will pay the face value of the policy to thebeneficiary. Term policy can be compared to a fire or marine policy which givesinsurance coverage within the time limit of the policy. If a provision is made in theterms of the policy, the term policy can also be converted into or whole -ftendowment policy.