Which insurance is the best insurance for life?

Answer 1

There are 2 primary types of life insurance. Neither is "best" because they serve different purposes and may be more appropriate at different times in one's life.

One type is "whole life", if which there are several varieties. This provides both insurance protection and within the policy is an element which may be called "savings". It is referred tyo as "cash value". Each premium paid is allocated between the actuarially determined amount (based on age, health history, and other factors) to provide insurance protection. Another portion of the premium goes into the "cash value" which may VERY generally be thought of as a savings account. Different companies and different policies do different things with the savings element-such as give the insured an option to invest it, at different degrees of risks, into investment vehicles that the company offers. Generally, the premium paid for whole life insurance remains stable and predictable, but it is a higher cost insurance than term life insurance. The cash value can be borrowed from the policy as a "policy loan" at an interest rate stated in the policy.

The other main type of life insurance is "term life". It is often called "pure protection" because premiums go strictly to the payment of the death benefit (and administrative costs). There are varieties of term life such that the premium can remain level for a period of years, after which it increases, sometimes very substantially--so substantially, in fact, that there may be a point when the insured is unable to continue the premiums at the new level and has to allow the policy to lapse. The additional danger then is if there has been an intervening medical issue, one may be rendered effectively uninsurable despite the premium.

Many people start a portfolio of life insurance that combines some whole life and a great deal of term life (because it is relatively inexpensive) to provide adequate coverage while their family is young and financial needs are greatest. As financial responsibilities decline, the need for great amounts of life insurance (and perhaps the need to pay increasing premiums) may also decline.

In all events, life insurance has to be a part of an overall financial plan and should be purchased after advice and counsel of a licensed life and health insurance agent.
There are mainly 5 types of life insurance policies:

Term Insurance Policy

Whole Life Policy

Endowment Policy

Money Back Policy

Pension & Annuities