Life Insurance Policy - The options Available to choose from

Insurance covers come in different forms to cater for different needs

. There are insurance policies designed for businesses, property as well as individuals and they seek to cover them from risks such as fire, accidents, death and illness as well. One type of an insurance policy which is recommended for every person living under the sun is the life insurance policy. This is a policy that provides for compensation to a person's dependants once the insured person has passed on.

The compensation acts as a form of financial security as the dependants come into terms with the loss of their breadwinner as they try to get back on their feet financially. Life insurance is provided in two major categories, i.e. term life insurance and permanent life insurance. When shopping around for an life insurance policy, it is always crucial to find out the benefits and limitations entailed in each of the two categories.

What may be suitable for one individual may not necessary be suitable for another, depending on factors such as their health condition, the size of their family as well as their ability to pay out the premiums on a regular basis. Your decision to buy a given type of insurance policy should be based on what your needs really are and what kind of financial security you would like to leave your dependants. Among the things that lead one to buy a life insurance policy includes certainty of death and failing health.

Certainity of death is to simply say that, death is one sure thing that no one will ever escape. However, the time of dying is not known. Knowing that, one will leave behind his offsprings is a strong reason for buying an insurance cover, if only to be sure that your loved ones will have some money to support themselves through the grieving period. As for failing health, a person may take a protection policy, in this case a term insurance policy, so that in case of any unforeseen trouble during the ailing period, the dependants of the insured ailing individual may be given a specified lumpsum payment.

A term life insurance may also cover incidents such as accidental death. This is death occurring through road accidents or other unforeseen events like fire breakout, riots or war. However, it does not cover death that results from suicide since it is considered an intentional death. It also does not cover death resulting from risky activities that the insured person puts themselves into willingly. For example, compensation will not be made for death resulting from parachuting, sky diving and risky sports like mountain climbing or deep sea diving.

When you consider going for permanent life insurance, you have four options to choose from. These are whole life endowment, which is basically payable upon death, universal life and the limited life option. All these come with their own specifications and have their own advantages as far as compensation and payment of premiums is concerned.

Life Insurance Policy - The options Available to choose from

By: Peter Gitundu

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