General Overview of Life Insurance Polices

Life insurance already become a conversant word in our real world. Most of the people just know a little surface things about it. If you do have a lot of life insurance questions, I hope you can find your answer here.

Basically, life insurance includes whole life, universal, variable, term and other types insurance. In this article I only gonna talk about very basic things about whole life insurance. universal, variable, term and other types insurance, I will talk about them in individual hubs. Please pay attention my update. Thanks

Life insurance is also called whole life insurance, whole life insurance is also known as permanent life insurance, ordinary life or straight life. why we also call life insurance as whole life insurance, because whole life provides permanent insurance protection for the length of a person's whole life.

Whole life insurance

• Feature of whole life insurance:

1. whole life insurance has the policy maturity that the policy pays in full ( the policy endows) when the insured reaches 100 years of age. Whole life insurance also has the building of cash values. Policy maturity and cash values cmobine to provide living benefits to the policy holder.
2. Menetary savings is commonly referred to as building the policy's cash values. Whole life polices guarantee a savings and a rate of interest upon the contract regularly secheduled intervcals
3. cash value are base on face amount of the policy, premium payments and how long the policy has been in force. Pollicy matures or endows when the face amount is equal to the cash value
4. Endows at 100 years of age. Most people can't live that long. At the age of 100, most people are considered to be statistically dead

After you know some basic features of whole life, Right now i will talk about the living benefits of whole life insurance.

Whole life insurance has two important living benefits, they are cash value loans, loan repayment.

• Cash value loans: with the cash value accumulating in the policy, the policy owner has a ready source of funds that can be borrowed at very resonable rates of interest.
  
• Loan repatment: Policy loans are not required to be repaid. outstanding loan will be deducted from the policy proceeds when the insured dies.

Whole life insurance has 11 different kinds of policies.

1. Limited payment life: This type of life insurance has level premiums that are limited to a certain time period ( less than 100 years). Let me give you a example: 20-pay life is that premuims are payable for 20 years from the policy's inception, after which no more premiums are paid.
   
2. Single premium whole life: Single premium whole life only one premium is paid, the policy is fully paid up with no further premium payments required.
   
3. Indeterminate premium policies: Under indeterminate premium policies employ a dual premium concept. A maximum premium, and a discount exist, a discount will depend on insurance company's investments, but the actual premium charged will never be more than the miaximum premium specificed in the contract.
   
4. Endowment policies: An endowment policy accumluates cash value every quickly, generally after the first permium is paid. For example, a 20 years endowment will pay a life insurance death benefits for 20 years at the face amount of the policy. If the insured dies during the endowment period, the death benefits will be paid with no tax xonsequences.
   
5. Modified whole life: Modified whole life premium are less than normal premiuns for the first few years, and subsequent premiums are higher than normal. The premium jump to high level premium once during the paid period, and remains the same after that jump.
   
6. Graded premium whole life: Graded premium whole life premiums are lower than whole life rates during the preliminary period ( usually 5 to 10 years), but the premiums will increase every years during the preliminary period till the premium rates are actuarialy equivalent to standard life. example: If you have a graded premium whole life, first year premium is 500, next year will become 1000, till the last year of the preliminary period where the premium is 2000 years( whole life standard rate). premiums will remain as 2000.
   
7. Adjustable whole life: it is a mix of term and whole life insurace. policy owner can change the face amount, premium and length of protextion without ever having to take out a new policy. Usually is it higher premium with lower face amount in whole life. Lower premium with higher face amount in term life.
   
8. Ioint life:Joint life insurance uses whole life insurance to cover the lives of two individuals on one life insurance policy. The death benefit is paid upon the death of the first insured. The surviving person can purchase life insurance without showing evidence of insurability
   
9. Joint life and survivorship: it is similar to joint life, but the death benefit is only paid upon the death
   of the second insured.
   
10. Economatic whole life: Economatic policies are also called enhanced ordinary life and extra ordinary life insurance. Mutual companies issue policies with a lower premium and face amount that begins to
    diminish after a few years.
    
11. Indexed whole life: Indexed whole life policies have a face amount of insurance that increases routinely with the consumer price index (CPI). The policy owner has two choices: 1) the policy owner can choose to pay a larger premium that remains level while the face amount of the policy increases, or 2) the policy owner may elect to pay a lower premium and agree to pay higher premiums when the CPI calls for an increase.
    

I hope above what i wrote can help you with your questions about life insurance. if you have any further questions, just ask, i whould like to help.

I will write specific article about universal life, variable life, term life and other types. If you interest about it, welcome to see my hubs, Thanks.