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Having life insurance is a necessity for any adult who has dependents, so consumers are advised to shop around for the best life insurance quotes to ensure that they get the best value for money. A life cover is simply an agreement between the policyholder and the insurer for the former to pay the survivors of the policyholder a predetermined amount of money in case of their death. During the search for cheap life insurance, consumers should bear in mind the fact that there are many types of policies in the market. Buying the best life cover at the lowest rates in the market is possible, and only takes a little bit of time and some effort.
Types of Life Insurance
Term Insurance: This policy provides coverage for only the period during which coverage is needed. The insurer only makes a payout to the designated persons if the policyholder dies within the term of the policy. The contract contains three important elements: the term of the policy; premium paid; and expected payout.
Whole Life Coverage: Unlike term insurance, this policy provides guaranteed death benefits in case the policyholder passes away. The main advantage of this policy is that the policyholder can use the policy as collateral for a loan. The policy comes with fixed annual premium payments as well as a fixed death benefit.
Universal Life Coverage: This is a variation of whole life coverage. It has flexible premiums as well as death benefits. It is sometimes referred to as adjustable life coverage. Like whole life coverage, this policy also offers guaranteed death benefits in case of death. The payouts are dependent on the prevailing interest rates.
Variable Life: This is very similar to universal life policy except for the fact that the rate of return is based on the performance of investment funds, not interest rates.