Life Insurance: Variations
The basic plan being the same, there may be some variations or modifications that make life insurance policies more suited to individual needs.
The 2 basic coverage policies are term life insurance and whole life.
The 2 basic coverage policies are term life insurance and whole life.
"Variations of Life Insurance Policies"
- Credit Life Insurance: When you take on a debt, like a personal loan, a loan to cover the purchase of appliances, loan to buy a vehicle, an educational loan or a mortgage loan, you can take a credit life insurance. The amount of the debt outstanding at the time of the death of a borrower will be paid by the insurance company, subject to policy maximums. When you take a loan from an organization, it may require you to buy credit life insurance or it could offer the cover as an additional service. Although credit life insurance is costlier than regular life insurance, it does not require insurability evidence, is easily available and is convenient.
- Modified Life Plan: This plan is best for people looking for higher premium coverage and finding it difficult to pay regular whole life insurance premium. This plan allows people to pay lower premium in the initial years and higher premiums in later years.
- The Family Policy: Generally sold in packages, the family policy covers all immediate family members under one contract.
- Joint Life and Survivor Insurance: Under this plan, protection is given to two or more persons and the death benefit is paid after the last insurer dies. The likelihood of paying death benefit is less, so premiums are generally low.
- Joint Life Insurance: This plan is similar to the above plan. The difference is that the premium is higher because the death claim is paid after the first insurer dies.
- Endowment Insurance: In this case, the insurance company pays the face amount to the beneficiary in case the policyholder dies within a predetermined time period or to the policyholder if he/she is still alive at the end of the specified period.
- Juvenile Insurance: This plan is meant to cover children and offers minimum protection. The amount of coverage would depend upon the child's age. Some policies allow a payor benefit rider, which waives off future premiums in case the payor dies.
- Senior Life Plan: This plan is meant for the elderly and offers minimal whole life coverage without a medical examination. In case of death, the applicants receive only a return of premium or minimum graded benefits. The cost of such policies is generally high.
- Pre-Need Insurance: This plan covers the insurer's burial expenses up to a small face value.
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