Securing Future With Life Insurance

Life Insurance is pretty much known to all of us. It is by definition, an insurance policy which provides a benefit to the dependants of the policyholder upon his or her death. The beneficiary receives the returns as stated in the policy, thus safeguarding him/her from any financial impact upon the death of the insurance holder. This benefit returns will be in consideration for the premium payments made by the insurance holder during his/her lifetime.

There are many types of policies offered by life insurance companies these days and it can get confusing when trying to choose a policy. Two of the most commonly quoted insurance policies are the term life and whole life insurance policies. Before settling for a quote for either of these, it is important to understand what both policies are and how they benefit you or your family as the insurer. So let us take a quick lesson on the most popular life insurance policies offered by insurance brokers.

Term Life Insurance Policies

The term life insurance policies are set for a specific time period. The premium that needs to be paid is usually cheaper than a whole life insurance. Typically, the term life insurance policies are used to insure mortgages rather than life which lasts for a specific length of time and can be calculated easily. They are also a preferred policy for young families needing financial protection but who are under money constraints. The entire premium is used to purchase the coverage and no amount is returned to the holder once the term ends.

Whole Life Insurance Policies

Whole life insurance policies are a combination of life insurance with an investment fund, which is built over time for the benefit of the policyholder. These are long-term policies and one of the longest-lived insurance contracts possible. As they are very flexible, they are often used to protect estates from inheritance taxes levied upon death.

Although the premium amount payable is much higher than that of term insurance, if the insurance holder is unable to pay the charged amount in the later years of life, the investment fund can be used to supplement the cost of the premium and thus maintain the protection until death.

Comparing Term insurance with whole life insurance

Although the Whole life insurance policies are more expensive than term life insurance, the highlight of this policy is the lack of an expiration date. The term insurance, on the other hand, can provide good insurance coverage throughout its term for a small premium but can expire before the death benefit is paid out, thus leaving the insured person looking for a new policy at a later stage of life.

The Verdict

Choosing a life insurance policy comes down to what the insurer is looking for. If you earn enough to support a family and is in no position to consider an insurance policy as an investment, you can easily insure your life for a small premium amount, keeping your beneficiary financially secure for a specific term. On the other hand, if you can afford a whole life insurance, consider it as an investment with added insurance benefits. Talk to expert insurance brokers in Dubai and find out your ideal life insurance policy.