Life insurance lays the foundation of your family’s financial protection from unforeseen events. The current market is full of offers, therefore, in order for you to choose the right program, need to discuss the main types of life insurance.
What is life insurance and why do you need it?
Life insurance is a time-tested way of protecting your loved ones and their families long-term. With the variety of life insurance available, you can choose a product that will provide you with a reasonable level of income during retirement and provide for your loved ones, business partners, or others dependent on you in the event of your death or disability.
Each type of policy is aimed at solving certain tasks:
- Financial support to a family without a breadwinner. In the event of an accident, the beneficiary specified in the contract (heir, beneficiary) will receive the coverage amounts up to 15X your current annual salary.
- Financial support in critical diseases. In most instances, life policies include riders that cover a list of critical illnesses for either a portion or the entire amount of coverage.
- Savings. Certain policies provide tax efficient means to accumulate savings for specific life goals, for instance children’s admission to a university, retirement, or making a major purchase. Importantly, upon payout life insurance benefits can be take in regular, scheduled amounts rather than lump sums.
- Increased return rate. Most life insurance schemes provide higher profits than bank deposits, while allowing for loans on the amounts accumulated and lending against the policies. For instance, you can set up a policy with $500,000 face value with a guaranteed return of Libor + 3%. You can also take 80% of the face value as a loan to yourself with an interest rate of Libor + 2% (netting 1% in profits) and reinvest that money in property, bonds or even bank deposits earning more additional income.
Types of insurance
All types of policies, in the first place, cover the death of the insured. Additional risks and conditions covered by the policy may differ between policies. Types of insurance can be divided into three main groups:
- High risk – allows you to additionally receive coverage of risks caused by unforeseen incidents – disabilities, critical traumas and diseases.
- Accumulative – additionally allows you to save money for large purposes – pension, children’s education, purchase of real estate, etc.
- Investment, as a rule, provides you with access to a wide range of financial instruments and their safe keeping.
How to choose the suitable plan
Choosing a plan is not a trivial issue. You are insuring the most valuable parts of your existence – your life and the fate of your loved ones
Since the modern market is inundated with various programs and companies that offer them, the task of choosing the optimal plan can become an impossible task.
International policies not only meet the primary goal – ensuring your loved ones in the worst case scenario – but also can provide significant liquidity, tax-free returns on investments within the policy, and a loan from the policy at an interest rate below the market price. All types of international policies can also provide a certain degree of asset protection.
A proper solution to your specific issues can be obtained by discussing your needs with us, as we have can obtain the best rates from all the world’s largest insurance companies and will be able to explain to you all the differences and features of a particular type of program and company.