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Tue, 23 December 2008
ALL ABOUT LIFE INSURANCE
Life insurance, sometimes referred to as life assurance, provides for a payment of a sum of money upon the death of the insured. Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. As in all insurance, the insured transfers a risk to the insurer, receiving a policy and paying a premium in exchange. The risk assumed by the insurer is the risk of death of the insured. A business that collects a person's savings by selling contracts (policies) often paid for through periodic premiums to provide cash payment upon death. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium.

Mortgage Life Insurance

Mortgage is one of the types of Term life insurance obtained by borrowers of a home mortgage. Mortgage life insurance can take by the owner of the property who has taken out a mortgage on the property. Mortgage life insurance pays the mortgage upon the death of the mortgagor/owner. It gives peace of mind by ensuring full payment of your mortgage in case of terminal illness or death. The premium in this plan decreases each year with the decreasing sum. This policy ensures apart from death or terminal illness, critical illness result in repayment mortgage being fully repaid. Its a big relief for insurer. Its also possible to buy combined mortgage life insurance policy and critical illness policy with a guaranteed fixed premium.

Universal life insurance

Universal life insurance is permanent life insurance with premiums that are not guaranteed. The company chooses the investment vehicle, which is generally restricted to bonds and mortgages. To a certain degree one can “design” a premium on this type of policy. The investment and the returns go into a cash-value account, which you can use against premiums or allow building. Universal life insurance often can be set up with a lower premium initially than whole life insurance. When a customer taking life insurance for life time, want to make sure that his family will receive insurance at death no matter how old he is. The three main options were whole life, a combination of whole life and term, or universal life. To get a 100 guaranteed rates, needed to pay approximately double than a normal projected rate in a whole life and term combination, universal life, or the guaranteed whole life rate.

A variation of a universal policy, often called universal variable life, allows policyholders to choose investment vehicles. Now days many companies come with a universal plan with premium payable to age 100 and cover insurance until age 120 or longer. The Companies providing completely guaranteed rates and can never be increased, regardless of the interest rates paid by the insurance company, or the mortality charges. These rates are approximately same as the universal life or whole life and term combination bought on a low cost basis. The main objective of Universal life insurance policy like the other life insurance policies is to provide the death protection to loved ones.

Source:http://www.123-life-insurance.com

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