At some point in life, we have heard about the prominence of taking a life insurance plan. It provides financial security from the uncertainties of life. God forbid if something happens to you; life insurance plans ensure that your family does not have to struggle financially. So, learn more about policies offered by AARP life insurance in this post and get one today.
When it comes to taking life insurance, you will come across different life insurance plans. It is imperative to understand what each plan offers before making the final decision.
Term Plan
The term life insurance plans offer a pure life cover, and its format is very straightforward. You have to pay a certain amount as a premium to the insurance company for a specific time period. And in case you die before the maturity period, the insurer will pay the sum assured to the beneficiary.
With this insurance plan, you do not get any maturity benefits. One of the main benefits of a term plan is that you get higher coverage for a lesser premium. A form of this plan reckoned as a term plan with return of premium or TROP also comes with maturity benefits.
Whole Life Insurance Policy
As the name goes, you get full life coverage in this type of insurance plan. The policyholder has to pay a regular premium, and upon his or her death, the insurer pays the assured sum to the beneficiary. Along with the assured sum, the whole life insurance policy also comes with saving elements.
You get to re-invest the growing cash amount or remit a percentage of the cash value. Moreover, you can also acquire a loan against the saving aspect. The premium remains fixed throughout the tenure of the policy. So over time, the weight of the premium becomes lighter on the wallet.
Endowment Insurance Policy
This life insurance plan is the combination of saving as well as protection. When the premiums are paid on time for a predetermined number of years, the insurance company pays the sum assured to the beneficiary upon the death of the policyholder.
On the other hand, if the policyholder survives the term, he or she can claim maturity benefits as a lump-sum payout. This type of life insurance plan also comes with saving components. You can use this plan to create goal-based savings, and in emergency situations, you can get a loan against it as well.
Final Thoughts
There you have it, the three types of life insurance plans. Each one of them serves a different purpose, but all are catered to provide optimum financial securities. If you want to save money on the premium amount, you should take the insurance policy early.
Similar to different life insurance plans, there are tons of insurers offering insurance plans. It is important to evaluate all your options properly before making the final decision. Consider the market reputation of the providers, compare their services, and check-out customer reviews. Taking time to assess these factors initially will help you save you from landing in complicated situations.
