Different Types of Insurance

For every life-changing event known to man, there is an insurance plan available in the market.  In this chapter, we will look at the most common insurance options offered to every consumer.  We will look at each insurance option in great detail, always with a view to providing you the insight and knowledge that would guide you in your quest for the best insurance protection.

LIFE INSURANCE

Death is one of the certainties of life.  However and whenever it strikes us, predicting such an event can be quite impossible.  Some people need security not for themselves but for their loved ones in case of untimely death.

General Characteristics

There are common elements to all life insurance policies.  There is a life insurance holder who is insured with the policy.  His death triggers the release of the purchased amount of insurance.  The application for the life insurance policy may be done by the policy owner (the insured individual), or may be automatic upon employment at a certain company that offers group life insurance policies.

Before an individual gets approved for life insurance coverage, the insurance company will put him through an application process that usually involves medical examination and risk value assessment processes.  This will determine insurability or acceptability of the applicant.  After approval of the application for life insurance, the insurance policy owner is obliged to make payments.  These payments are known as insurance premiums.  The value of these payments has been determined before the start of coverage.  Timely payments of insurance premiums are necessary to keep life insurance coverage enforced.

A life insurance policy usually has a face amount or face value.  This is the total amount of benefit payable to the beneficiary or the beneficiaries upon the death of the insured individual.  The beneficiary or beneficiaries are the person or persons officially named by the insurance policy holder as the authorized recipient of the life insurance benefit.  In cases where there are no beneficiaries specified, the benefit usually defaults to the spouse and children of the life insurance policyholder.  But the terms and conditions vary across specific life insurance policies, insurance companies, and states.