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Line 9: − * [[Safety|Protection]] policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. An example is term life insurance. Sometimes these policies have additional "accidental death and dismemberment" (AD&D) benefits, where the policy face value is double if a death is the result of an accident or other benefits are paid due to loss of limb, sight, or hearing from an accident. AD&D policies (albeit small, such as $1,000) are sometimes offered free by a credit union to members (with repeated solicitations to increase coverage -- for additional premiums paid). Also, some of these policies will decrease coverage if a person reaches a specified age, such as 65 or 70. + + + + + + + + + + + +
→Types of policies: AD&D subsection
==Types of policies==
==Types of policies==
There are two basic types of life insurance:
There are two basic types of life insurance:
* [[Investment]] policies – where the main objective is to facilitate the growth of capital by regular or single premiums. In the United States these are typically: [[Whole life insurance|whole life]], [[Universal life insurance|universal life]] and [[Variable universal life insurance|variable life]] policies.
* [[Investment]] policies – where the main objective is to facilitate the growth of capital by regular or single premiums. In the United States these are typically: [[Whole life insurance|whole life]], [[Universal life insurance|universal life]] and [[Variable universal life insurance|variable life]] policies.
* [[Safety|Protection]] policies – designed to provide a benefit in the event of specified event, and are typically paid as a lump sum upon death. An example is term life insurance.
It should be noted that some life insurance policies either reduce coverage at a certain age or event (such as reaching age 65); if the insured wishes to continue coverage at a specified amount the premiums will likely increase dramatically.
===Accidental Death and Dismemberment (AD&D) Policies===
AD&D insurance is a form of life insurance, which may either be an additional benefit on an existing life insurance policy, or a separate policy completely.
In those cases where it is an additional benefit on an existing policy, the policy may pay double the face value if a death is the result of an accident (not brought about by an excluded event, such as war or suicide). Additionally, separate benefits are paid for loss of limb, sight, or hearing from an accident.
Some companies offer free AD&D only policies to customers as a bonus for doing continued business with them (a common example is a credit union offering such a policy to an account holder). The initial policy is very small, such as only $1,000 of coverage, and is generally followed by repeated solicitations to increase coverage -- for additional premiums paid.
It should also be noted that some AD&D policies, or benefits on existing life insurance policies, terminate or decrease significantly at certain ages or events. A notable example is under the Federal Employees Government Life Insurance (FEGLI) program, AD&D coverage is double face value of whatever coverage the employee chooses during working years, but at retirement all AD&D benefits terminate completely.
[[Category:Insurance]]
[[Category:Insurance]]
[[Category:Business]]
[[Category:Business]]