Major Types of Life Insurance Available
When buying life insurance, there are so many options that it may be difficult to know where to start. While an insurance agent can certainly help you understand these options in simple terms, learning about the major types of insurance can help your research and know the right questions to ask. Here are the major types of insurance available and a little information about them.
Term Insurance
Protection with this life insurance is provided for a limited period of time. The amount of time could be in 5 or up to 20 year blocks as well as specific ages up to 80. These policies are available with differing premium guarantees. If the guarantee is for a long length of time, the premium will be higher initially. The beneficiary receives the full face amount for the policy in the event of your death during the period of term.
The premiums become locked for the length of time specified through the terms of the policy. Earlier ages can offer lower premiums for the life insurance but will be higher as you age. The plans could be converted to the whole life insurance. Level insurance is provided if the exact same benefit is continued across the time of the policy. There is also decreasing coverage that is available throughout the period for the same rate of insurance.
Whole Life
Whole life insurance is also known as permanent insurance or ordinary life may be another term used. This insurance policy protects for the entire life of the insured. During younger ages, the cost for the policy may exceed the amount needed but it builds up a cash value over time that will cover the cost in later years. The cost for whole life insurance is usually more that term life and the premiums are payable throughout the lifetime of the policyholder.
The cash value of this life insurance puts forth a savings into the policy. The amount may differ in comparing insurance companies. There are many types of whole life insurance that are available and options to add-on. Depending upon your needs, consulting with a local insurance agency can answer any questions you may have regarding this type of insurance policy.
Variable Life
This type of insurance for life is based on the cash value and face amount which are then specified in units. The premiums are then allocated into investment pools. These include any money market accounts, stocks, mutual funds, bonds, and real estate investments.
There is also the coverage of a minimum death benefit when purchasing traditional variable insurance. Universal insurance does not pay a minimum and the coverage may terminate due to missing the high premium payments that are possible.
When purchasing any type of insurance, check with your local agent to find out all of the details. Buying insurance should be consulted with a professional to determine the right amount of coverage and the details for the type of insurance. There are many factors that are considered when buying insurance and contacting an agent can answer questions you may have.