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UnCategorized Insurance is something that people do not quickly run for. It is the basic human characteristic. No one wants to spend money on something which they cannot enjoy now or something that they will not be able to enjoy at all. However, people do realize, sooner or later that insurance is essential and hence, they go for it but they are not really aware of the differences between whole life and term life insurance. They are actually the two broad types of insurance which exist and hence, understanding them is essential. The term and the whole life insurance have similarities as well as differences. The similarity is that both of them pay the beneficiaries of the policy holders a lump sum amount of money in case of unfortunate death of the policy holder. The beneficiaries can make use of this money to fulfill their financial needs. However, despite the fact that these two forms of insurance have the same benefit, there are differences as well. We will take a quick look at the differences in the remaining segment of the article. Whole Life vs. Term Life: A Quick Look Whole Life Option: In this option, the insurer will pay the beneficiaries of the insured person a lump sum amount of money in the event of death of the person insured. There will be a sequence of investigation carried out by the insurer to ensure that the demise of the person insured was a natural event and not a set up. Once proved, the insurer will hand over the money to the beneficiaries. The beneficiaries are then free to use the money as per their own requirements. However, this is one side of the whole life insurance which is referred to as the death benefit. There is another side as well which is called the survival benefit. If the life insured survives throughout the term of the insurance, the insurer will actually pay a lump sum amount of money to the policy holder upon maturity of the policy or the policy holder may opt for cash benefits upon retirement. It is because of survival benefit that the whole life insurance policies have higher prices that their term insurance counterparts. Term Life Option: In case of term insurance, there is only death benefit and there is nothing called survival benefit or maturity benefit. In event of the death of the person insured, the insurer will run a series of investigation and then actually pay a lump sum amount of money to the beneficiaries of the person insured. However, in case the policyholder survives through the term of the insurance, there will be no payments whatsoever. This means that there are no survival benefits for the policy holder. It is because of this, the price of the term insurance is lower that the price of whole life insurance. Talk to your financial advisor to find out the type of policy you need. However, make sure that you execute your personal choice as per your needs. About the Author: 相关的主题文章: