Affordable Critical Illness and Life Insurance
The Internet is an empowering tool that allows consumers to compare life insurance policies from leading carriers to obtain the most affordable life insurance quotes. Through the web, life insurance shoppers can take advantage of a competitive insurance marketplace that works for them.
Nevertheless, finding affordable life insurance policies is only one part of the equation. Insurance shoppers also need to ensure that they’re purchasing the right type of insurance policy for them.
Critical Illness and Life Insurance plans, like all insurance types, are a form of risk management used to hedge against economic risks and uncertain losses. Academics will define insurance as the equitable transfer of risk from one entity through another. But in laymen’s terms, insurance is paying a little now to cover a potentially bigger expense later on.
When you buy life insurance, you have to understand that you’re buying a product—the insurance policy.
The company selling the insurance policy is called insurer, while the person or entity buying the insurance is known as the insured or policyholder.
The price of the insurance policy is the premium, which can be paid in one lump sum or in installments.
Today’s consumer protection laws require that the transaction between the insurer and policy holder should be clearly stated. The insured will be obligated to pay the premium amount stated in the insurance policy, while the insurer should promise to compensate (indemnify) the insured in the event of large or devastating loss.
The Critical Illness and Life Insurance company gives a contract known as the insurance policy stating the terms, conditions and circumstances under which the insured will be compensated.
There are about two thousand insurance companies in the United States. Each of the companies specializes or some companies cover the different kinds of insurance that range from life to car to health insurance.
It is important to understand that the Critical Illness and Life Insurance policy is a contract between the insurance company and the policy owner in which benefit is paid to the beneficiaries. There are two types of life insurance:
- Temporary term insurance
- Permanent life insurance
In addition to these two basic types of insurance policies, there are several subclasses of Critical Illness and Life Insurance, such as whole life coverage, universal life coverage, limited-pay, endowments and accidental death.
Temporary Term Life Insurance
Temporary term insurance provides life insurance coverage for a certain period of time in exchange of a stated premium. The basic term life insurance policy does not accumulate in cash value.
The premium buys protection in the case of death and is considered pure insurance. The three factors considered under the term insurance are: face amount (protection or death benefit), premium to be paid (cost to the insured) and length of coverage (term).
Many companies sell life insurance using the three parameters. The face amount could either decline or remain constant, while premium could either increase or remain. This term can be for one or more years. The common type of term is annual renewable term. The mortgage insurance is a level premium with declining face value policy. The face amount aims to equal the amount of mortgage on the policy owner’s residence so that mortgage will be paid if the insured dies. This type of insurance is the most affordable of all.
Permanent Life Insurance
Meanwhile, permanent life insurance is still effective until the policy matures (pays out) not unless the owner fails to pay the premium when due. The policy usually cannot be canceled by the insurer except for the reason of fraud in the application or failure to fulfill an obligation (such as paying the premiums).
Permanent life insurance accumulates cash values that lessen the amount of risk to the company over a period of time. The more time, the greater the accumulation… and the less overall risk to the insurer.
After the insurance policy’s cash value has increased, the policy holder can have access to the money through withdrawing or borrowing against that cash value, within the limits and restrictions of the policy.
The good news is that you’re not alone. At Critical Illness Insurance, we can help you explore your best options and tailor a plan to meet your needs. Call us now at 1-561-210-5822 and speak to our experienced and helpful agents to get the answers you deserve.