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Life Insurance policy: Back to BasicsLife Insurance policy: A Slice of HistoryThe modern insurance contracts that we have today such as life insurance, originated from the practice of merchants in the 14th century. It has also been acknowledged that different pressures of security arrangements have already been in place since time immemorial and somehow, they are akin to insurance policy contracts in its embryonic form.The phenomenal growth of life insurance from almost nothing a hundred years ago to its present gigantic proportion is not of the outstanding marvels of present-day business life. Essentially, life insurance became one of the felt needs of human kind owing to the unrelenting demand for economic security, the increasing need for social stability, and the clamor for security against the hazards of cruel-crippling calamities and sudden economic shocks. Insurance coverage is no much longer a rich man's monopoly. Gone are the days when only the social elite are afforded its security because in this modern era, insurance agreements are riddled with the assured hopes of many families of modest means. It is woven, as it were, into the extremely nook and cranny of national economy. It touches upon the holiest and most sacred ties in the full life of man. The love of mother and father. The love of wives. The love of children. And the love of business even. Do check more about http://www.sukanyasamriddhiaccount.net - post office savings scheme - and http://www.sukanyasamriddhiaccount.net/sukanya-samriddhi-account-calculator/ - sukanya samriddhi yojana calculator - .Life Insurance policy like Financial ProtectionA life insurance policy pays out an agreed amount referred to as the sum assured under certain circumstances generally. The sum assured in a life insurance policy is intended to response for your financial needs as well as your dependents in the event of your dying or disability. Hence, life insurance policy offers financial insurance coverage or security against these risks.Life Insurance policy: General ConceptsInsurance policy is a risk-spreading device. Generally, the insurance company or the insurance policy company pools the monthly premiums paid by all of its clients. Theoretically speaking, the pool of monthly premiums answers for the losses of each insured.Life insurance policy is a new contract whereby one party insures a new person against loss by the dying of another. An insurance policy on existence is a contract by which the insurance company (the insurance policy organization) for a stipulated sum, engages to pay a certain amount of money if another dies within the ideal time limited by the policy. The payment of the insurance policy money hinges upon the loss of life and in its broader sense, life insurance policy includes accident insurance policy, since life is insured under either contract.As a result, the life insurance policy contract is between the policy holder (the assured) and the life insurance policy organization (the insurer). In return for this insurance coverage or security, a superior is paid by the policy holder for an agreed period of time, dependent upon the type of policy purchased.In the same vein, it is important to note that life insurance is a valued policy. This means that it is not a contract of indemnity. The interest of the person insured in hi or another person's life is generally not susceptible of an exact pecuniary measurement. You basically cannot put a price tag on a person's life. Thus, the measure of indemnity is whatever is fixed in the policy. However, the interest of a person insured gets susceptible of exact pecuniary measurement if it is a case concerning a creditor who insures the life of a debtor. In this particular scenario, the interest of the insured creditor is measurable because it is based on the value of the indebtedness.Common Life Insurance policy PoliciesGenerally, life insurance policies are marketed to cater to retirement planning often, savings and investment purposes aside from the ones mentioned above. For instance, an annuity can extremely well provide an income during your retirement years.Whole life and endowment participating policies or investment linked plans (ILPs) in life insurance policies bundle together a savings and investment aspect along with insurance protection. Hence, for the same amount of insurance policy coverage, the premiums shall cost you more than purchasing a pure insurance product like term insurance.The upside of these bundled products is that they tend to build up cash over time and they are eventually paid out once the policy matures. Thus, if your dying benefit is coupled with cash values, the last mentioned is paid out once the insured dies. With term insurance however, no cash value create up can be had.The common practice in most countries is the marketing of bundled products as savings products. This is one special facet of modern insurance practice whereby part of the monthly premiums paid by the assured is invested to create up cash values. The drawback of this practice though is the monthly premiums invested become subjected to investment risks and unlike savings deposits, the guaranteed cash value may be less than the total amount of monthly premiums paid.Essentially, as a future policy holder, you need to have a thorough assessment of your goals and needs. It is only after this action where you can cautiously choose the life insurance product that best suits your needs and goals. If your focus on is to protect your family's future, make sure that the product you have chosen first meets your security needs.Real World ApplicationIt is imperative to help make the most out of your money. Splitting your life insurance policy on multiple guidelines can save you more money. If you perish while your children are 3 & 5, you will need a lot more life insurance security than if your children are 35 & 40. Let's say your children are 3 & 5 now and if you perish, they will need at least $2,000,000 to live, to go to college, etc. Instead of getting $2,000,000 in permanent life insurance policy, which will be outrageously expensive, just go for term life insurance policy: $100,000 for permanent life insurance policy, $1,000,000 for a 10-12 months term insurance policy, $500,000 for a 20-12 months term insurance policy, and $400,000 of 30 years term. Now this is very practical as it covers all that's necessary. If you perish and the youthful kids are 13 & 15 or young, they will get $2M; if the age group is between 13-23, they get $1M; if between 23-33, they get $500,000; if after that, they still get $100,000 for last expenses and funeral expenses. This is perfect for insurance policy needs that changes over time because as the children grow, your financial responsibility also lessens. As the 10, 20, and 30 years term expires, payment of monthly premiums also expires thus you can choose to use that money to invest in stocks and take risks with it.In a global world run by the dictates of money, everyone wants financial freedom. Who doesn't? But we all NEED financial SECURITY. Most people lose sight of this important facet of financial literacy. They invest everything and risk everything to make more and yet they end up losing most of it, if not all- this is a fatal formula. The best approach is to take a portion of your money and invest in financial security and then take the rest of it and invest in financial freedom.Ultimately, your financial plan is evolving because you are constantly evolving constantly. You can't established a plan and then forget it. You need to keep an open vision on your money to make sure it is working hard because that money needs to feed you for the next 20-30+ years that you will be in retirement. You have to know how to feed your money so that it can feed you later now.