Insurance {life insurance}| can pay money to a named beneficiary after death of insured person. Payment can be one lump sum or monthly payments.
disability
Life insurance policies can pay for arm, leg, or eye loss {permanent disability}.
types
For most people, decreasing term insurance is the best buy in life insurance, because premiums are lower in early life, when paying is most difficult. Benefits decrease as need for benefits decreases.
amount
Amount needed is difference between total expenses family will have through working life, taking into account inflation and expenses attendant on death, and total income that they have with no insurance.
Life insurance {participating whole life insurance} can be like whole life insurance, but it also pays dividends to insured person, depending on insurance-company investments. Dividends can give cash to insured person, reduce future premiums, buy more insurance, or reinvest.
Life insurance {term life insurance} {term insurance}| can be for 5, 10, 15, 20, or 30 years. In ordinary-term life insurance, insurance premiums increase each year, as chance of death or disability increases. In long-term life insurance, premiums stay constant, at level between ordinary-term lowest and highest premiums, because payments average. In decreasing-term life insurance, premiums stay constant at low level, but payment to beneficiary decreases over the years.
Life insurance {variable whole life insurance} can be like whole life insurance, but it conditions payments to beneficiaries on insurance-company investment performance.
Life insurance {whole life insurance} {straight life insurance} can keep premiums constant at high level and insurance amount constant. Policy cash value builds as payments accrue. Cash value is total extra money paid to insurance company, plus interest. Cash value can be security for loans, income at retirement, or trade-in for another life insurance type. Premium owed is statistically expected cost of insurance coverage over statistically expected lifetime, divided by number of payment years. In first years, payments are more than true cost of protection at that time, while later they are less.
Outline of Knowledge Database Home Page
Description of Outline of Knowledge Database
Date Modified: 2022.0225