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Life Insurance Policy

'''Life Insurance policy''' is an agreement between the policy owner and the insurance company to provide the family of the person with security as well as compensation in case of the early death of the person or the policyholder.

There are two major types of life Insurance policies

'''Term Life Insurance Policy'''- these policies provide insurance cover for fixed term until they reach a certain age and they do not increase cash value benefits. They do not build up the cash value for the insured. These policies are the most purchased insurance products due to their lower premium as compared to the permanent life insurance policies.

The benefits of Term Life Insurance Policy are that they have affordable premiums and death benefits that are non-taxable. But it is also true that they expire eventually and the premium amount rises as the person ages.

You can buy one of the three different term policies the first one is the level premium term in which there is a provision for fixed premiums it also allows the insured to increase the policy every two years. The second one is the decreasing term that is purchased as the mortgage protection insurance and the third one is the increasing premium in which the premium amount increases as the person ages without needing any proof of health fitness to get the benefits.

'''Permanent Life Insurance Policy''' – these policies cover the insured for the complete life. The premium of these policies is generally higher than the term policies. It also provides the insured person with the option of accruing up cash value that is cash deferred.

The Permanent Life Insurance policy accrue the cash value by combining the percentage of premium paid by the policy owner and the insurance that is paid by the insurance company.

The Permanent Life Insurance Policy can be single premium policy, Survivorship policy in which two people are insured and universal policies that allow the insured persons premium and death benefits change as the needs of beneficiaries change.

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