If a person is looking for a policy that provides an insured amount along with a non-guaranteed investment, they most likely are looking to sign up for a term life assurance policy. In the event of the plan holder's demise, his or her beneficiary is paid the guaranteed amount, plus the non-guaranteed investment value. This kind of policy usually offer extra bonuses such as terminal and annual bonuses.
Life insurance, on the other hand, insures the policy holder for a set period of time. If death comes while the plan is in place, the insurance company will then pay the beneficiary. The downside is if the plan holder survives until the end of the policy period, there will be no residual value or any pay out that will be received.
Assurance and insurance can be often misunderstood. The main difference is that assurance provides coverage to an event that is sure to happen, like a person's death. Insurance covers the policy holder from an event that may happen. Most people insure their home, car, or business.
It is a fact that these two provide the policy owner's family with financial assistance and peace of mind in the event of his or her death. Nevertheless, there are still things that need to be considered prior to getting covered.
For level term life assurance, if the insured party dies within the specified period of time, their beneficiary receives the entire lump sum free of tax. There may be instances wherein they might need to pay for the inheritance tax. This type of policy is intended to provide financial assistance after a plan holder's death.
It can also be used to cover a mortgage. This ensures that the deceased's loved ones will not lose their mortgaged property, or will have to pay for an existing interest only or flexible mortgage. The premium remains the same for the entire period that is covered. If the plan holder feels that he or she no longer needs the policy, they can stop paying the premium without any fine.
Additional benefits can also be added onto a level Term Life Assurance. Most people opt to sign up for the critical illness cover. This benefit pays them a tax free lump sum if they are diagnosed with a critical illness, and survive the diagnosis after 28 days. In case they make a full recovery, the cash is still theirs to keep. Family income benefit, income protection or permanent health insurance, accident, unemployment, and sickness payment protection are some of the other additional benefits that a policy holder can sign up for.
Life insurance, on the other hand, insures the policy holder for a set period of time. If death comes while the plan is in place, the insurance company will then pay the beneficiary. The downside is if the plan holder survives until the end of the policy period, there will be no residual value or any pay out that will be received.
Assurance and insurance can be often misunderstood. The main difference is that assurance provides coverage to an event that is sure to happen, like a person's death. Insurance covers the policy holder from an event that may happen. Most people insure their home, car, or business.
It is a fact that these two provide the policy owner's family with financial assistance and peace of mind in the event of his or her death. Nevertheless, there are still things that need to be considered prior to getting covered.
For level term life assurance, if the insured party dies within the specified period of time, their beneficiary receives the entire lump sum free of tax. There may be instances wherein they might need to pay for the inheritance tax. This type of policy is intended to provide financial assistance after a plan holder's death.
It can also be used to cover a mortgage. This ensures that the deceased's loved ones will not lose their mortgaged property, or will have to pay for an existing interest only or flexible mortgage. The premium remains the same for the entire period that is covered. If the plan holder feels that he or she no longer needs the policy, they can stop paying the premium without any fine.
Additional benefits can also be added onto a level Term Life Assurance. Most people opt to sign up for the critical illness cover. This benefit pays them a tax free lump sum if they are diagnosed with a critical illness, and survive the diagnosis after 28 days. In case they make a full recovery, the cash is still theirs to keep. Family income benefit, income protection or permanent health insurance, accident, unemployment, and sickness payment protection are some of the other additional benefits that a policy holder can sign up for.
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