Endowments Life Insurance Policy Cash value Lump Sum

A life insurance policy is often provided by an insurance company which will allocate a limited amount of funds when an individual who has been insured passes away. The amount of money that is allocated is called the face value of the policy. It is often distributed in installments, or a lump sum to the insured beneficiary.

There are many kinds of life insurance policies in particular there will be addressed three main kinds of life insurance in this short report: term life insurance; life insurance; and endowment life insurance. Term life insurance will issue benefits only when the person insured passes away within the covered period as stipulated in the policy.

This policy might extend to a area of up to one to 40 or more years. Term insurance in the United States roughly counts for half of the total face value of all life insurance policies sold each year. In Canada specifically, term insurance only accounts for 30% or less of the total face value of all life insurance policies purchased that year. Some of the benefits of term life insurance is that it costs much less than the other forms of life insurance.

This is usually because this insurance has no cash value. For those that are on a strained budget or who only need coverage for short amount of time. In many instances individuals that have younger children will purchase term insurance to help cover their children if they were to perish; as their children are still being grown into adults. Whereas renewable term life insurance will allow a policyholder to continue their policy immediately after the term of the policy has expired.

Whole life insurance provides coverage for the policyholders entire lifetime that the individual is insured. Roughly 80% of those life insurance policies purchased within the United States and Canada often come in this form of insurance. A straight life policy is one of the more common forms of a whole life policy. In this policy specifically premiums are paid every so often as long as this insured individual lives. On the other hand there is a limited payment policy which allows lifetime protection of the insured. The premiums here are much higher than for the straight life policy because the premiums are to be paid within a fewer amount of years.

Endowment life insurance: This form of life insurance will pay the face value of a policy on the policyholder. This is usually a method of saving money. The policyholder will often employee this endowment policy to help finance their children’s education. This type of insurance is the most expensive.

These endowment policies often mixture within twenty years or in some cases when the person insured reaches the age of 65. When the policyholder lives into the maturation stages they will then be in receipt of the policies face value. When and if this holder of the policy dies before this time of maturation the beneficiary will receive the face value of the policy.