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Overview of Life Insurance

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Overview of Life Insurance

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  1. Overview Of Life Insurance

  2. Term Life Insurance • Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary sum of money upon the death of the insured person. • There are three key factors to be considered in term insurance: • Face amount (protection or death benefit), • Premium to be paid (cost to the insured), and • Length of coverage (term). © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  3. Permanent life insurance • Permanent life insurance is life insurance that remains active until the policy matures, unless the owner fails to pay the premium when due. • The policy cannot be cancelled by the insurer for any reason except fraudulent application, and any such cancellation must occur within a period of time defined by law. • The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value. © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  4. Types of Permanent Insurance • Whole life coverage • Universal life coverage • Limited-pay • Endowments © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  5. Whole life coverage • Whole life insurance provides lifetime death benefit coverage for a level premium in most cases. • Premiums are much higher than term insurance at younger ages, but as term insurance premiums rise with age at each renewal, the cumulative value of all premiums paid across a lifetime are roughly equal if policies are maintained until average life expectancy. © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  6. Universal life coverage • Universal life insurance (UL) is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payment, along with the potential for greater growth of cash values. © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  7. Limited-pay • Another type of permanent insurance is Limited-pay life insurance, in which all the premiums are paid over a specified period after which no additional premiums are due to the policy in force. • Common limited pay periods include 10-year, 20-year, and are paid out at the age of 65. © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  8. Endowment policy • An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on death. • Endowments can be cashed in early (or surrendered) and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it. © Copyright 2011 - 2012 www.LifeInsuranceDirect.com.au

  9. This presentation has derived numerous citations from various sources including http://en.wikipedia.org. The complete article can be found here. • LifeInsuranceDirect does not claim the ownership over the content of this presentation.

  10. Thank You LifeInsuranceDirect.com.au

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