Insurance is one of the concepts that are overly hyped not only by the insurance brokers but also by the insurance corporations all over. With the skyrocketing stress on getting life insurance for everyone, it is high time that we become aware of the nuances involved. Will the life insurance in which you invest today fetch good returns sometime later? Can you expect profits on your insurance policies? What insurance is utmost important for you as an individual? Get to know these by reading further.
Life Insurance – A Brief Overview
Insurance is the protection that you purchase to meet out the unforeseen situations or eventualities that might or might not occur by making a small payment monthly/half yearly/yearly in the name of premium. By doing this, you make your nominees eligible to get financial assistance that might cover your debts in case if something happens to you during the tenure of the insurance plan.
Life Insurance is a necessary evil. It is very essential if you look at it from the risk perspective. It covers the risk associated with your life for the tenure of the insurance policy. But if you intend to get profits or fetch returns, life insurance is definitely not a good choice.
Types of Life Insurance Policies
Basically, there are 2 types of insurances namely Term Insurance and Whole Life Insurance. Term insurance is the type of insurance in which you pay a very nominal premium with no returns. It is very useful if your nominees are confronted with eventualities during the tenure of insurance policy. However, this term life insurance policy is valid only for the tenure/term of the policy. If you intend to continue the policy, then you might be subjected to medical tests and the term life insurance policy might be subjected to revision in premiums which is usually exorbitantly high.
Whole Life Insurance plan is the one in which you pay a fixed premium, build up a cash-value and get returns at the time when your nominees are confronted with an unexpected eventuality or when you cash in the policy on maturity or request for a loan against it. The premiums are usually very high when compared to the term life insurance policies due to the cash back value associated with these policies at the time of closure.
Making the Right Choice is Challenging!
Life Insurance is an area in which you cannot expect big returns. Considering this fact and with the strong belief that it is a necessary evil to cover the risks associated with our life, it's ideal to opt for a term insurance plan which covers the risk at very nominal rates and invest the difference that you get in other utile financial avenues which would promise to accrue huge returns.