Most insurance companies see the need to provide more technologically accessible and innovative services to better serve their customers. With the rise of the digital economy, this couldn’t be more accurate.
There is a growing need to ensure your loved ones are well taken care of through customized life insurance and policy plans. Thankfully, several leading insurers like Industrial Alliance are focusing on shortening the complicated process of obtaining a life insurance plan that’s perfect for you.
Although knowing which life insurance plan to take can be tricky, this would guide you on the best life insurance and policy plans.
Types of Life Insurance Policy
Life insurance policies are in two forms: Term Insurance and Whole of Life Insurance. These two subdivisions are further divided. We will consider these as well. However, using predictive analytics, many insurance companies can gather data to analyze risk, anticipate trends, and determine the best plan for you. So always check with your service provider.
Term insurance is a type of life insurance policy that you take out for a specific period. It can only be claimed if the policyholder taking such insurance dies within the insurance term. Should the worst happen, people often take life insurance to enable their families to cover certain necessary costs or ongoing financial obligations. These might include housing or education costs for their children.
Depending on the circumstances, this policy may be perfect for you. For instance, if the policyholder has ten years left to pay for his mortgage, he can take out term insurance that will cover him for this period.
There are, however, three categories of term insurance:
- Level Term Insurance
Level term means that the dependents (that is, the family or loved ones of the policyholder) will get a predetermined sum no matter when they need to or decide to claim. The sum will be paid regardless of the economic circumstances that might have arisen when they claim.
In essence, the premium does not shift as a result of inflation or other economic factors. Therefore, if you have a long-term policy, the same amount of coverage might end up being worthless over time because of the increase in the cost of living.
- Decreasing Term Insurance
On the other hand, this means that the insurer’s payout amount will decrease over time. This would be the case when the policyholder has a debt, mortgage, or loan repayment that will reduce with time.
For instance, in a mortgage, the policyholder’s policy would be designed to align with the remaining balance owed to the mortgagee for the same period as the mortgage. You must be abreast with as much necessary detail concerning the mortgage when taking out the insurance cover for this policy.
- Increasing Term Insurance
However, the increasing term insurance entails that the insurer would pay out more than the premium on the policy. This policy is usually best for persons whose families might need more help over time.
This form of insurance policy is designed to adjust to and mitigate the effects of inflation and other economic hassles. The increase can either be a fixed rate or index-linked (in line with inflation). These rates and payments are usually automated on most insuretech platforms.
Whole of Life Insurance
This form of insurance guarantees the dependents’ payment no matter the period that the policyholder dies. In essence, this insurance covers the policyholder for the whole of his/her life.
It operates such that you pay into a policy, and the insurer agrees to pay your loved ones upon your death, regardless of when it might be. The price for the whole of life insurance is usually higher than that for term insurance. There are some categories of the whole of life insurance:
- Joint Life Insurance
This is a form of insurance taken out by couples or partners when they intend to make sure that their partner and children are adequately taken care of after one of them dies. It ensures two persons at once without them needing to take out individual insurance policies. However, note that the left partner would no longer be covered under most joint life policies once you make a claim.
Over 50s Life Insurance
This sort of policy is designed for persons aged above 50. This insurance cover considers the lifestyle and needs of persons of this age range, as they would want the flexibility of adjusting a policy to be more affordable. Also, people at times take out this policy to cover funeral costs.
Most life insurance companies like Scotia Life allow you to manage your life insurance coverage and change the status of your policy via mobile apps. Regardless of the nature of the plan you settle for, you can be sure of technologically-enabled solutions and ready answers to any queries. There is no better time to get life insurance.