A life insurance policy can be defined as a legal agreement or contract between two parties, namely the insurance company and the individual or the policy holder. Such policies spell out a lot of aspects like the duties of the policy holder, his/her rights, the premium payable by the policy holder every month or year, the benefits or coverage that the policy holder is entitled to and lastly, the circumstances under which the benefits can be obtained or paid.
Life insurance policies can be obtained in a lot of different ways, one can purchase them via mail order, brokers, agents or online via insurance websites. When it comes to purchasing life insurance policies, it would be necessary to find out what one gets by going for such a policy. Now, the coverage of such policies depends upon the circumstances of the policy holder, his/her age, the number of beneficiaries and other factors.
When you go for a life insurance policy you can basically get two types of cover: cash value and term value. In case of cash value policy, the policy holder has to pay a high amount of premium during the initial stage and a part of that would be used for setting up an account under the name of the holder. The policy holder can then gain access to that money either for increasing his/her income after retirement, for paying overdue premiums or for applying for a loan.
In case of term value policy, the coverage is provided for a fixed amount of time, which can be one year or more than one year. This kind of insurance policy requires the holder to pay more premium as he/she gets older with age because the chances of dying gets higher as one grow old. In case of the death of the life insurance policy holder, the beneficiary or beneficiaries stated in the policy can make a claim for the money after notifying the insurance company about the policy holder’s death and requesting a claim form.
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