Classification of The Best Source Of Security

There are several methods to attain financial security to the life and property of individuals. The insurances form a best method to meet expenses caused during events of accidents and other such personal losses. Life insurance is a basic contract between the insured person and an insurance company in which the business transactions are often mediated by insurance agents. These agents motivate the people about the benefits of various policies and play a key role in providing the lump amount of money (premium) to the beneficiaries or nominees of the policy holder.

The main functions of the life insurance policies are planning of various pension and retirement savings, protection of mortgages of home and other assets, providing security to family. The legal policies are having several clauses in the agreement statement which prevents the provision of the financial benefits for the person who died unnaturally. The major events in which insurance claim cannot be applied for by the persons are suicide, death during communal violence, war, riots etc. The life insurance policies can be grouped into the following types:

Universal Life Insurance
Term Life Insurance
Whole Life Insurance
Mortgage Protection Life Insurance
Senior Life insurance and
Children’s Life insurance

Whenever coverage of insurance benefits takes place within a specified period of contract varying in the range of 5, 10 or up to 25 years, it is known as term insurance. The agreement clauses clearly states that the benefits are not supplied if the term of contract expires. Whole life insurance provides coverage to the insured person for his whole lifetime. The major drawback is that the premium amount to be paid does not change even if the person has retired which make it difficult for old people to cope up with monthly expenses. Universal life insurance is similar to the above said insurance but offers greater flexibility of operation in terms of withdrawal of money once cash accumulation has occurred.

Senior life insurance suits the aged people who do not wish to be a burden to others. This type of insurance helps to gain the assured benefits for meeting funeral expenses. Children’s life insurance policies are often chosen by elders to provide financial stability when they grow up. The protection of family against unpaid mortgage debts by the policy holder can be made possible with the Mortgage protection life insurance. All these life insurance policies are having several advantages such as advanced tax benefits and increased savings.