If you have just begun your search for a life insurance policy, you know it is a daunting task. There are so many companies and types of insurance available, each with its own levels of coverage that it might seem light you will never end your life insurance comparison quest. Here’s a simple explanation of the three primary types of life insurance available.
Term Life Insurance
Term life insurance extends coverage in two ways: it pays the amount you are insured if, during the coverage period, you are diagnosed with a terminal illness, and it pays your beneficiaries the insured amount if you die before the expiration of the coverage.
When you do your life insurance comparison, this is more than likely the type of insurance you will initially be looking for, but keep in mind that other insurance plans exist that cover you in different ways.
Total and Permanent Disability Insurance (TPD)
If you end up in a situation where, due to becoming totally and permanently disabled, you will never be able to work again, TPD will help you and your family avoid financial ruin. It is usually not paid out until your disability or illness has impacted your life for a minimum of six months, or the insurance company has determined that you will never be able to work again.
This policy allows you to choose between two pay out options: either, if you can’t work in your occupation again or if you can’t work in any capacity at all.
This plan is intended to cover you if you suffer from one of a predetermined list of ailments, such as cancer, heart attack, or loss of limbs. The list will differ between policies, and can be a stand-alone plan or it can be tied in with a term life insurance plan.
The goal of this plan is to assist you and your family when it is anticipated that you won’t be able to work for an extended period of time due to illness or injury