The various types of life insurance programmes and policies available

There are a variety of life insurance products and policies available in the market. Life insurance products are generally split into four major categories namely Term, Accidental Death cover, Whole Life policies, Universal Life policies, Limited pay and endowment. It will be a good to get a grip of each of these major types before you buy any policy.

Term Insurance gives the holder life insurance coverage for a term of months or years so long as the customer pays the premiums required. This policy will not accumulate a cash value. The term insurance policy will give the holder protection due to death and nothing else. Most insurance companies will sell term insurance policies with lots of different options in order to provide customers with what they want. The term policy can be for one or more years. Although the term insurance contract is set in stone customers can choose to pay their premiums at a set rate or on an increasing scale and they can change as they see fit in the future.

Accidental death cover is a life insurance product that covers the policy holder when they die due to an accident. It will cover accidents from most kinds of injuries including work related ones. These policies will also usually cover accidental loss of limbs or loss of hearing etc. Because it only covers accidental insurance these policies can be very cheap and affordable and are good for people for work in dangerous jobs. However you will need to read the fine print of the policy because usually it will not cover people that put themselves in harm way for pleasure or work. Most of the permanent life insurance policies will include accidental coverage in the full plans as well.

Whole life insurance policies provide the customer with a value of life insurance based on a cash amount i.e. $500,000 or $1,000,000, the customer will then pay a premium based of the amount of cover they wish to receive. Universal life insurance policies are similar to whole life policies in that they provide permanent life insurance but they give you more options in relation to how you pay your premium and the benefit can grow in value over time. The varieties basically centre on offering you different options for premium repayments, changing the level of increase on the cash value and the ability to lower the death benefit as the client see fit.

One of the rarer types of life insurance is the Limited Pay insurance, there are quite simple in design and is largely used when clients are expected to make large sums of money within a set time frame. Basically the premiums are paid over a set period of years and after the set period of time no more premiums need to be paid. Endowments are permanent life insurance policies where the cash that is build up over the life of the policy is the amount the beneficiaries receive when the policy holder reaches a certain age or passes away. Thus life insurance are important for anyone to secure for his life.

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