Life Insurance

Types of Life Insurance

When it comes to considering life insurance, there are many types to choose from. The four major types include Term Life Insurance, Whole Life Insurance, Universal Life Insurance and Variable Life Insurance.

It is important to understand the key features of each type of life insurance and the differences between them. To support your insurance decision, it is important to look at the facts and do your own research.

Term Life Insurance

Term life insurance is a popular and simple type of life insurance. It is used to provide coverage for a specific period of time, known as the “term.” Term life insurance generally does not accumulate any cash value, but can still provide coverage for those who don’t need a great deal of insurance or don’t want the extra costs associated with other types of life insurance.

The most common terms are 10, 15, 20, 25, and 30 years. As long as the premiums are paid, the policy remains in force as long as the policyholder is living. When the term is over, the death benefit will no longer be applicable. This type of insurance is generally used for those who are looking for temporary coverage or don’t want to commit to a more expensive policy.

• Death Benefits: If the policyholder dies within the specified term of the policy, a beneficiary of the policyholder will receive a death benefit, usually in the form of a lump-sum cash payment.
• Flexible Coverage: Term life insurance policies offer flexible coverage amounts which means the amount of coverage can be adjusted to meet the changing needs of the policyholder.
• Low Cost: Term life insurance policies are typically the least expensive type of life insurance available because they only provide coverage for a specific period of time.
• No Cash Value: Term life insurance policies do not have any cash value or surrender value, which means they will not accumulate any cash value over time.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance and is the most comprehensive type of life insurance available. Whole life insurance provides coverage for the policyholder’s entire life and accumulates cash value over time. Whole life insurance is a popular option for those who want the security of a permanent policy and the flexibility of having a cash value.

• Death Benefits: If the policyholder dies during the policy term, the beneficiary will receive a death benefit, usually in the form of a lump-sum cash payment.
• Accumulated Cash Value: Whole life policies accumulate cash value over time, which can be used to help pay for premiums or can be borrowed against in the form of a loan.
• Flexible Coverage Amounts: Whole life policies offer flexible coverage amounts, which means the amount of coverage can be adjusted to meet the changing needs of the policyholder.
• Fixed Premiums: Whole life policies generally have fixed premiums, meaning the premiums don’t change for the policy duration.

Universal Life Insurance

Universal life insurance is a type of permanent life insurance that provides coverage for the policyholder’s entire life and accumulates cash value over time. Universal life insurance is a popular option for those looking for the flexibility of a cash value and the security of a permanent policy.

• Death Benefits: If the policyholder dies during the policy term, the beneficiary will receive a death benefit, usually in the form of a lump-sum cash payment.
• Accumulated Cash Value: Universal life policies accumulate cash value over time, which can be used to help pay for premiums or can be borrowed against in the form of a loan.
• Flexible Coverage Amounts: Universal life policies offer flexible coverage amounts, which means the amount of coverage can be adjusted to meet the changing needs of the policyholder.
• Flexible Premiums: Universal life policies generally have flexible premiums, meaning the premiums can be increased or decreased during the policy term.