What is the principle of life insurance? Weegy:
The value for the policy owner is the 'peace of mind' in knowing that the death of the insured person will not result in financial hardship.
The foundation of life insurance is the recognition of the value of a human life and the possibility of [ indemnification for the loss of that value. Life-based contracts tend to fall into two major categories:
Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.
Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies. ] Expert answered|Seng|Points 21|User:
What are the benefits of universal life insurance, and what are the possible drawbacks of this type of policy?Weegy:
Many people use life insurance, and in particular cash value life insurance, as a source of benefits to the owner of the policy (as opposed to the death benefit which provides benefit to the beneficiary). [ These benefits include loans, withdrawals, collateral assignments, split dollar agreements, pension funding, and tax planning. Final expenses, such as a funeral, burial, and unpaid medical bills. Income replacement, to provide for surviving spouses and dependent children. Debt coverage, to pay off personal and business debts, such as a home mortgage or business operating loan. Estate liquidity, when an estate has an immediate need for cash to settle federal estate taxes, state inheritance taxes, or unpaid income in respect of decedent (IRD) taxes. Estate replacement, when an insured has donated assets to a charity and wants to replace the value with cash death benefits. Business succession & continuity, for example to fund a cross-purchase or stock redemption buy/sell agreement. ] Expert answered|Seng|Points 21|
Education|No Subcategories|Expert answered|Rating 1| 9/16/2011 6:04:45 PM