Life Insurance Policy Types

There are four different life insurance policy types. Your decision between life insurance policy types will basically depend on your needs, your families needs and your budget. While life insurance policy types differ mainly are divided into these four categories, there are additional options and factors to keep in mind when choosing life insurance policies for yourself and your family members. The large variety of specific life insurance policy types can lead to confusion. This article will serve as a guide to the four life insurance policy types, discussing important information such as the advantages and disadvantages of each kind.

Life insurance policy types: term insurance

This is perhaps the most simple of the four life insurance policy types. Basically, this is an insurance policy which covers you for a certain period of time. These plans are based on specific time frames and specific prices. If the policy owner dies within the given period of time, the beneficiaries are paid according to the amount specified in the policy. If the owner does not die within that period of time, the insurance company keeps the paid premium and the owner is not entitled to any payments.

Life insurance policy types: total and permanent disability insurance

Unlike other life insurance policy types, this type is dependent on disability, rather than death. Basically, the term disability refers to the inability of the policy holder to work in any occupation or their own occupation because of disability. Depending on your choice of TPD life insurance policy types, the insurance company will agree to aid in paying the cost of living for you and your dependents, your debt payments and your rehabilitation costs.

Life insurance policy types: income protection, salary continuance or disability insurance

In this type of life insurance policy, the insurer agrees to pay the holder the amount of income lost due to an inability to work. This inability to work may be brought about by injury or sickness. Depending on the income protection life insurance policy types, policy holders are normally paid a certain percentage of their gross wage at the time they of claiming.

Life insurance policy types: trauma insurance

Unlike other life insurance policy types, trauma insurance is based on trauma, critical illness or injury. In these life insurance policy types, the insurer pays a certain amount to the holder when he or she is affected by an illness or injury that will change the person's lifestyle. Some of the most common illnesses and injuries include heart attacks and cancer. There are many different trauma life insurance policy types, which differ depending on the conditions and options of the policy.