Can You Explain Some Principle Of Life Assurance Policies?

Types of life assurance policies: The major types of life assurance Policies are given below:

1. Whole life Policy. This policy covers the whole life of the insured person. The assured amount is payable only after the death of such policy holder to his legal representatives, its rates of premium are comparatively lower and are paid throughout life of for a specific period. The policy is useful to provide protection to family. It is also named as straight life policy.

2. Term Policy. This is the oldest type of policy which is issued for a fixed period of time. If the assured person dies within the specified period the insurance company has to pay the face value of the policy to the beneficiary. In case he survives this period, he gets nothing. This is the cheapest form of policy but its scope is very limited.

3. Last survivorship Policy. This policy is one under which the sum insured in payable on the death of the last survivor. The sum insured is not paid if one person dies before another. This policy may be issued for three or more lives.

4. Endowment Policy. This policy is written for a fixed number of years. The sum assured to be paid either on death or after the expiry of the fixed period whichever comes first. This is the most popular type of life insurance which is particularly suitable for the family man in the event of his premature death.