Invest in Your Beneficiaries Future With Life Insurance

People the world over are turning to life insurance as an investment option for their families. It is no wonder, because life insurance has its advantages over a period of time. Notwithstanding the fact that some insurance companies have earned themselves the reputation of not paying up at the moment of truth, people are beginning to foray into this industry as a good way of saving and investing. Perhaps because governments are taking more interest and setting up nodal agencies to monitor insurance agencies and ensuring against insurance fraud both by the insured and the insurance company.

People wonder how insurance can be used as an investment for the future of the family. The simplicity of the system works out when one does the math. Let us say that an insured takes out an insurance policy of a hundred thousand US dollars. This policy is due to mature in 20 years, which means that if the insured survives the period of the policy he will get one hundred thousand dollars plus the accrued interest which would be in the region of 15000 US dollars or more depending on the interest and the premium.

In the past, like about 30 years ago, the premium of these insurance policies was very low. This was because the policy was different back then. If the insured survived the period of the policy he or she would not get anything back. However, in modern times things have changed. The insured gets back the entire amount he or she paid as premium through the period along with the accrued interest, which in most cases works out to as little as 50 percent of the insured amount. There is more!

In modern policies the insured receives a sum of money at quarterly intervals of the period of the policy. This means that if the policy is for a period of 20 years the insured will get certain sums of money at five year intervals, given of course that he or she has kept up with the insurance premiums. This works out to the benefit of the insured in two ways.

The sum paid out at quarterly intervals can be invested elsewhere while the insurance policy continues. The longer the insured lives the more he or she gains and do the beneficiaries. Let us say that the insured gets paid three quarterly payouts and then expires. On the death of the insured the beneficiaries get the whole insured sum while the three payouts the insured received will still be invested elsewhere. In any case the total gain will be equal to the three payouts plus the insured sum. Had the insured survived the policy period he or she would have gained less by receiving only the total policy value plus the interest on the sum.

Life insurance companies are today using different techniques for their investments in order to make their payouts more attractive. They are investing in units of shares in the stock market and mutual finds and linking the investments to the policies. This way it works out to the mutual advantage of the insured and the company making the investment choice of millions the world over.

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