Types of Life Insurance
Building wealth is an activity which everyone is keen on partaking in. But in order to build wealth, it is important to have a personal discipline, having an understanding of current events so you have an idea of what to do and finally, it is important to have the right type of life insurance. There are two types of life insurance, term and single premium. Term insurance is “renting” life insurance coverage. The insurance coverage is calculated based on a person’s mortality rate and the calculations made by the actuaries of the insurance company and therefore, provides a rough estimate of the sum of money a person’s heirs will receive. Generally speaking, as a person lives through each year they are closer to death. Because of this the premium on the insurance would increase every year. So instead of having to pay more and more sums of money to insurance companies each year, the companies offer something known as “level term policies” and the insurance premium is guaranteed not to rise over a specified period of time, although you would have to pay a little bit more than usual in the first year. For example, an insurance company would offer you a steady premium payment of over 10-30 years. But the problem arises when the level term policy reaches its end and the premium rises again in price.