Insurance means you are protecting something in return to some rewards. In this way the most important thing for anyone should be the life as without life nothing is achievable. Insurance of life is utmost important as this is not for you but for your loved ones.
Life insurance is a guaranteed agreement between insured and the insurance company. The insured pays premium to the insurance company for a particular time mentioned in the policy and the insurer in return promises to return a lump sum amount during the death of the insured person or when the policy expires.
Many private and government companies are available in the market that give insurance. Life insurance requirements may vary from person to person depending upon the policy taken. There are mainly three types of life insurance i,e Term Insurance, Permanent Life Insurance and Whole life coverage insurance.
- Universal Type of Life Insurance
This is also called permanent insurance policy that combines some features of term insurance policy with a money market type investment and thus pays a return on market rate. Generally what happens in Universal insurance is the excess of premium that you pay during the tenure is credited to the cash value of the policy. This cash value is then credited to you each month with interest.
Universal type insurance is different in terms of whole insurance and is generally called flexible premium paid insurance. In this you pay your premium in a fund and the insured company adds interest on that. Any kind of deductions like applicable fees is done from that account. The main benefit of this type of life insurance is that it is flexible, the cash value can be used for various purpose like education, and all the returning are tax-free.