What are the types of life insurance: Best 2022 review

 

Life insurance is an agreement or contract that involves an insurer and an insured whereby the insurer pays an amount of money to the survivor of the insured after his/her death. There are mainly 4 types of life insurance, and this includes; the universal, whole, variable and the term life insurance. For a better appraisal we will give a brief explanation below on each of this life insurance.

What are the types of life insurance: Universal life insurance?

What are the types of life insurance

Universal life insurance is a type of insurance that offers the low cost protection of term life insurance with savings elements of whole life insurance, it is a cash value life insurance. Universal life offers a tax-deferred investment chance to the insured, flexible premiums and an increasing death benefit.

Universal life insurance allows premiums to be paid into the policy’s account where it generates interest. Every month, an amount is deducted from the account value, this deductions are fees for insurance protection. The insured or policyholder is allowed to take loans from the account value or make withdrawals for personal needs.

Universal life insurance have several key uses that makes it popular and preferable amongst employees.
This keys uses includes
Universal life insurance provides for families in times of loss of income or when educational or mortgage funds are needed.

Funds can be used for estate, business planning and special needs. Universal life insurance also offers death benefit which includes life insurance proceeds that are income tax free to the beneficiaries. It’s premiums are flexible, it allows the insured to decide the amount of life insurance and the amount of premiums subject to policy premiums.

What are the types of life insurance: Whole life insurance

What are the types of life insurance

Whole life insurance is type of insurance contract containing premiums as well as investment components. As part of The Whole life insurance components, the insured individual’s family gets a predetermined amount after his/her demise.

Under the whole life investment components, a cash value is accrued and the insured person can withdraw or borrow against it. Policyholders are allowed to accumulate wealth while payments of premiums go towards insurance costs. Regular payment of premiums aids equity growth in savings account. Whole life insurance covers an individual (the insured) throughout his life.

Whole life insurance are of different types that are suitable for different kinds of people. In some cases, after the death of a breadwinner, It can provide family members with funding. Whole life insurance can be useful when paying off mortgage, liquidating business debts, and to make sure that cash is readily obtainable and accessible for family when serious events like sickness, accident or death occurs.

It differs from Term life insurance that pays out only after the death of the insured. There are living benefits in whole life insurance and buildup of cash for family members after the demise of the insured.

What are the types of life insurance: Variable life insurance

What are the types of life insurance

Variable life insurance is a kind of permanent life insurance where the cash value is invested in a number of sub-accounts that are similar to mutual funds. Its policies offer certain tax benefits for the insured, benefits like the ability to utilize cash value on a tax benefited basis.

Variable life insurance investment features are made to help protect an employee and his/her family and also provide means to professionally managed investments that can aid employees to accumulate money for future needs. It’s Policy can be used for various financial needs such as education funding, long-term care and retirement planning.

Variable life insurance can be seen as a permanent renewable term life policy for the insured with a cash value. An insured individual will have to pay insurance premiums into the cash value, then this cash value is invested into sub accounts.

The policyholder is allowed to decide which account his/her cash value is invested into. Every month, insurance fees are pulled from the cash value, and as time goes, cash value can grow large enough that making payments will no longer be necessary for the owner. Its policies can be used as investment account that can be passed on free of tax.

During job application, many applicants go for a competitive employee benefits package. Perks like Life insurance can help an employee pay off debts and other bills, ignite the feeling of financial security, and also protect an employee’s loved ones and family.
Most employers offer a kind of life insurance coverage that is supplementary and meets the needs of most families.

What are the types of life insurance: Term life insurance

What are the types of life insurance

Term life insurance is a type of life insurance that is inexpensive, simple, and easy to understand compared to other types of insurance. The reason why term insurance is seen as the best choice for almost all employees is because it provides the benefits that most people need without all the extras that they do not need.

Just as the name implies, term life insurance is available for certain period of time such as one year, ten years, twenty years or more. After the death of a policyholder, his/her beneficiaries gets a payout or death benefit. There is no payout or death benefit if the insured person dies after the term has expired.

Premiums which are mainly based on overall health, person’s age, and life expectancy are required by term life insurance. Term life insurance is mainly effective for a temporal coverage and only payout after the death of the policyholder. It is one of the cheapest types of life insurance.

There are various kinds of term life insurance to choose from, example yearly renewable, level premium or leve term, and decreasing term.
Each of this terms has its own set of benefits that makes them well-fitted for every individual.
Term life insurance is typically the best type of life insurance for young people with families.

What types of documents are required for life insurance?

What are the types of life insurance

Documents play an essential role when it comes to applying for an insurance policy and also filling claims. It is pertinent to provide the necessary documents under both circumstances.

If a document is missing or details in the life insurance is missing it can result to a big problem for the policyholder. If the policyholder fails to provide the necessary documents and important details needed the insurance provider could terminate or deny the policy in some cases. KYC documents are important if you want to purchase a life insurance policy.

Below are the list of documents needed while applying for a life insurance policy:

1- Photo Identity Proof of the Proposer/Life Assured.
2- Duly filled Proposal Form.
3- Age Proof of the Proposer/Life Assured.
4- Photograph of the Proposer/Life Assured (Adhaar Card, Voter ID Card, Passport etc.)
5- Address Proof of the Proposer/LIfe Assured
6- PAN Card of the Proposer/Life Assured
7- Income Proof of the Proposer/Life Assured
8- Medical Examination Report of the Proposer/Life Assured

What are the documents required for life insurance claims?

What are the types of life insurance

insurance claims is a request made by an insured (policyholder) to an insurance company for a compensation or coverage for covered policy event.
Life insurance claims typically fall under three main categories, which are Maturity Claim, Death Claim, and Rider Claim. The benefits of claim under life insurance are received by the beneficiary in the event of the death of the policyholder. Let us elucidate the above concepts for a better appraisal.

Maturity claims

In the maturity claim, the insured individual gets a compensation from the insurance providers upon the maturity of the plan. This compensation involves sum assured along and any other incentives or bonus.
The insurance providers reaches in advance to the insured individual along with a bank discharge form in order to avail this benefit. Then the insured individual is required to fill in the details of the form alongside the appropriate documents that are required and then it is sent back to the bank.

Death claims

Under death claim, the beneficiary is required to intimate concerning the claim written form to the insurer earlier. The insured name, place of death, policy number, date of death and claimant name should be included in the information. Claim intimation form can be availed by the beneficiary by visiting the insurance provider or by downloading from the insurance company’s official website.

To easily settle the claim, you are required to submit all the important documents. Documents like original policy document, death certificate, insured age, needs to be submitted by the nominee.
The insurance company is required to settle the claim within 30days after receiving the documents receipts submitted by the policyholder.

However, a case whereby the insurance company will need to further an investigation may emerge, in this scene the insurance company must complete its process within 6 months from the date of receiving the claim intimation.

Rider Claims

Riders claim are typically additional benefits which the insurance company provides by paying an additional premium amount together with the standard insurance policy. A life insurance plan can be joined with different types of riders such as accidental rider, critical illness rider, waiver of premium, and hospital cash rider etc.

Under the rider claim process, various types of riders get settled through various means. Rider claims such as waiver of premium, accidental death etc are settled by adhering to the procedure of death claim settlement. The rest of the rider claims can be resolved by submitting all the required documents together with the policy copy and duly filled claim form.

What are the types of life insurance

What are the documents required for life insurance maturity claims?

What are the types of life insurance

The following are the list of documents required for life insurance maturity claims:

1- Original Policy Document
2- Bank Account Details (copy of bank statement/cancelled cheque)
3- Photo ID Proof of the policyholder
4- Duly filled Policy Discharge Form

What are the documents required for life insurance death claims?

What are the types of life insurance

The following are the list of documents required for life insurance death claims, especially death caused by medical conditions:

1- Medical Records
2- Original Policy Documents
3- Treating Doctor’s Statement
4- Duly Filled Claim Form
4- Attending Physician’s Statement
6- Nominee’s Photo ID Proof (Adhaar Card, Voter ID Card, Passport etc.)
7- Death Certificate issued by local authority
8- Nominee’s Bank Account Details (such as bank statement/ cancelled cheque)

What are the documents required for life insurance rider claims?

What are the types of life insurance

The following are the list of documents required for life insurance rider claims

1- Doctor’s Report
2- Original or Copy of Police Inquest Report
3- Original or Copy of FIR
4- Original or Copy of Postmortem Report
5- Other Documents (as asked by insurance provider)

what should be done if you misplaced the documents required for life insurance plan?

What are the types of life insurance

If the documents required for life insurance plan is misplaced by the policyholder, the policyholder must immediately lodge an FIR at a police station. The next thing to do is to intimate the insurance company concerning the missing documents required to register for a life insurance claim in order to avoid any future hassles. Right after, the individual must apply for a duplicate copy of all the documents needed.

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