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Life Policies Explained
Life Insurance Policies
Did you know that life insurance policies have pretty much been around since the first days of organized civilization? Records from ancient times tell stories of merchants that took out life insurance policies whenever they went on journeys. Of course, the holder of the life insurance policies prayed that the merchant never came back to collect on the policy. Life insurance policies as we know them today actually got started in 1700s England when businessmen would meet at Lloyd’s pub and discuss the ways people provided for their loved ones after their death. This was how Lloyd’s of London – a well known insurance firm – got its start and modern life insurance was born. The ideas borne from Lloyd’s of London swept across the Atlantic to America and many Christian churches started their own form of life insurance policies for their poor constituents who need help burying their loved ones.
Life insurance policies are considerably different than what they used to be and they are more evolved than their ancestors. The life insurance policies today are pages upon pages of information that is designed to protect you and the insurance company from fraud. Plus, you have more options to choose from in the type of insurance you can qualify for. There are three popular life insurance policies that people seem to prefer: term life; whole life; and universal life.
The best life insurance policies you can purchase are term life insurance. These life insurance policies works by paying a specific premium for specific length of time and it is usually renewable at the end of the specified timeframe. Your premium in these types of life insurance policies never fluctuates, making it easy to slip into your monthly budget. You also get a higher death benefit with term life insurance policies and if your lifestyle does not change drastically between renewal periods there usually is no problem getting the policy renewed over and over again.
On the opposite end of the spectrum are whole life insurance policies, the absolute best life insurance policies available. This life insurance offers you the best of the best with the most options available and the most price ranges for its kind. What makes whole life insurance the best life insurance is that it lasts your entire life and cannot be canceled simply because your health or lifestyle changes. There is also a cash value attached to this type of life insurance which means you can borrow against it or cash it in if you need the money. Price wise it’s the most expensive. Service wise, it’s the best life insurance in the long run.
Another life insurance option is universal life insurance. This type of life insurance falls in the price range between term life insurance and whole life insurance and it offers the benefits of both. It will accumulate a cash value that grows over the life of the policy while still offering the policy holder a sense of security if anything should happen. Policy holders can borrow against the cash value of the policy if they find themselves in a financial bind and it is a very flexible and the best life insurance policy option, especially since you will be able to see the return on your life insurance investment.
New to the life insurance policies industry are viatical settlements. They are a bit problematic to many life insurance companies because the work on a different concept that the three life insurance policies listed above. What happens is this: a terminally ill patient who needs cash can sell their life insurance policies to a company or an individual who then names themselves the beneficiary of the life insurance policies. Usually the life insurance policies are purchase by the new beneficiary for a fraction of the value of the policy itself and it gives the original policy holder cash to use while they are still alive to pay off their debt or do something for themselves before they die. When the buyer cases in the life insurance policies when the seller dies, they make themselves a nice profit, usually between 35 and 50 percent return on their investment. It is a legal transaction, but it drives insurance agencies up the wall.
