Life Insurance is a plan for
spreading the risk of economic loss airing the death of an
individual among a group of persons (who make periodic
contributions called premiums) so that each one's share of the
loss is slight. It is insurance upon the lives of human
beings. Life insurance is written in a variety of forms and
plans to fit individual needs and circumstances.
Term provides a Temporary
protection for a specified number of years with the face value
being payable whenever death occurs. However, it is important
to note that the insured is not irrevocably committed to pay
premiums throughout his lifetime. Ordinary Life is the most
flexible of all policies, and because of this flexibility, it
can be changed or adjusted in later years to suit the
insured's needs or financial circumstances, or it can be
surrendered at retirement age to either provide or augment a
retirement income.
An Endowment policy provides
permanent protection for a specified number of years with the
face values being payable at maturity or prior death.
Endowment periods are usually 10, 15, 20, 25 and 30 years or
retirement plans to mature at ages 55, 60 or 65.
An Annuity is the disposal of an
estate already created on the annual, semi-annual, quarterly
or monthly basis. It is designed to provide an income for
life.
A Limited Pay Life Policy provides
permanent protection throughout the lifetime of the insured,
but the premium paying period is limited to the number of
years specified, such as 10 Pay Life, 15 Pay Life, 20 Pay
Life, 25 Pay Life, 30 Pay Life and Life Paid -up at age 65.
This is a benefit that provides
for the payment of the sum insured if death results from an
accident.
Disability Wavier of
Premium
Disability Waiver of Premium
provides that if the insured should become totally and
permanently disabled through natural causes for a period
exceeding six months, he will be refunded the premiums which
he paid during the first six months of this illness, and
future premiums will be waived until he regains health and
resumes his duties or to the maturity of the policy, whichever
is sooner.
Clean -Up Fund refers to the
amount of money which is needed to free the estate by cleaning
up all outstanding debts, such as funeral and last expenses,
unpaid current bills, administration costs, taxes, death
duties, executors costs or the cost of letters of
administration.
The desire to provide a college
education for their children is usually strongly implanted in
the bosom of most parents. Funds should be provided to enable
the child or children in a family to have all the advantages
associated with a good education.
Retirement Income is what a person
owes to him or herself. When a person outlives his earning
period, he has lived too long economically. Ensure the dignity
and peace of mind, which is necessary to happy retirement. All
that will be there when you get there is what you send on
ahead while your earning power gives you the ability
Non-Forfeiture Values are benefits
required by law to be made available to the insured in the
event that he or she discontinues premium payment. A table of
values which indicate that amounts, values and periods of time
for each of these benefits for each policy year must be
printed in the policy.
Cash savings Value is the annual
cash growth of the policy which is so designed that at the
expiration of the endowment period, the savings value and the
risk will equal, and so, the policy would endow or mature.
Reduced Paid Up is an option which
the policy owner could exercise, if for some unforeseen reason
he cannot continue to [ay premiums, but he wants to remain
insured for the some period. The amount would be reduced o
that the policy would be fully paid-up. It would be
non-participating, but the period of coverage would be the
same as was originally contracted for.
If for some reason or unforeseen
circumstances, the policyowner or insured cannot continue to
pay premiums but he wants to remain insured for the same
amount, this could be achieved by exercising the extended term
option, which will provided full coverage for a limited number
of years and days.
The Grace Period is a period of 31
days which is given to the insured after the premium becomes
due. If death occurs within the period, the insured is
covered, but the premium will be deducted from the proceeds.
Automatic Premium Loan provides
that when a policy shall have acquired non-forfeiture values,
if the remains unpaid at the expiration of the grace period,
the premium is automatically paid from the Cash Value, and
charged against the policy as a loan.
This provide that if the insured
commits suicide while sane or insane within two years from the
date of issue of the policy or from any reinstatement of the
policy, the insurance under the contract shall be sum equal to
the premiums paid and no more. However, if suicide is
committed after two years, a sum equal to the face value will
be payable.
The beneficiary is the
person/persons or organization named in policy to receive the
proceeds in the event of death.
Primary and Contingent Beneficiaries
A primary beneficiary is the
person or group of persons named in policy that has first
claim to the proceeds at the death of the insured.
A contingent (secondary)
beneficiary is the person or group of persons named in the
policy who will receive the proceeds if the primary
beneficiary is not living at the time the insured dies.
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