Introduction of Life Insurance

Term Life Insurance

Term life insurance is one kind of life insurance which provides coverage for a limited period of time. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term life insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.

Whole Life Insurance

Whole life insurance is one kind of life insurance that remains in force for the insured's whole life. It offers permanent life insurance coverage with a fixed regular premium.

Endowment

Endowment is one kind of life insurance designed to pay a lump sum after a specified term (on its 'maturity') or on earlier death. Typical maturities are ten, fifteen or twenty years up to a certain age limit.

Pure Endowment

The difference between Endowment and Pure Endowment is that Pure Endowment only provides the benefits on it's maturity and the insured is still alive.

Annuity

Annuity is one kind of life insurance that is usually used for the retirement plan. The Policy Owner should pay an initial premium or premiums into an account to accumulate its value and the insurance company will pay out a sum at pre-determined intervals. There are two periods: the accumulation (when payments are paid into the account) and the annuitization (when the insurance company pays out).

Riders

Riders are modifications to the insurance policy added at the same time the policy is issued. These riders change the basic policy to provide some feature desired by the policy owner. A common rider is accidental death, which used to be commonly referred to as "double indemnity", which pays twice the amount of the policy face value if death results from accidental causes, as if both a full coverage policy and an accidental death policy were in effect on the insured. Another common rider is premium waiver, which waives future premiums if the insured becomes disabled.