Different Types of Life Insurance Covers
The essence of an insurance cover is to help protect someone from an unfavorable event whose occurrence is uncertain. The insurance cover should help alleviate the negative effects that the unfavorable event brings along and thus enable the insurer to get back to the position that they were before the event took place. The life insurance works under the same principle and its used to protect one against premature death. It is also possible to find places where the term life assurance is used in place of life insurance. The cover thus helps cover the major expenses of the loved ones as though the insured was still alive.
There are many assumptions which people make regarding life insurance cover. Some people are made to assume that more they pay in terms of premiums, then the better that insurance is. In other cases, people may determine the premiums depending on the amount of premiums which is also incorrect. This is due to the fact that a person should put into consideration their individual needs which should guide one to know the cover with the most favorable. This then translates that the best insurance cover differs from one person to another. It is also important for someone to keep reviewing their cover just to ascertain that they meet their current need as opposed to assuming the cover they took a while ago is still serving them up to now.
There are different life insurance covers which one can take. The most basic insurance cover is the term assurance cover. This insurance, like the name suggests, is one where the insurance lasts for a defined term after which the person needs to renew it. The amount of money that one needs to pay with such a cover is determined by the age and health of the person as well as the amount of debt that they have. With this type of cover, the lesser the amount one pays in premiums, the less the indemnity they will enjoy. The policy covers one’s funeral expenses and debts if one dies within the period covered by the cover.
The whole life insurance cover is another of the life insurance covers. The cover can also be referred to as the variable insurance cover or the permanent insurance cover depending on the company or the state. This insurance cover is supposed to cover a person until when they die which is why they are called permanent covers. This then translates that the premium changes in value as one acquires more obligations. With this type of cover, one is also one entitled to receive dividends which one can use to reduce the monthly premiums.