According to some researches, life insurance comes in different forms and you should bear in mind that not all policies are created the same. The death benefit amounts may be the same but the durations, structures and costs vary across the types of policies. Before you decide to get your own life insurance plan, it is very imperative that you have an apparent and superior understanding about the different types of life insurance that you can choose from. Here, you will learn and know the different types of life insurance and these are as follows:
This type of life insurance has the ability to provide guaranteed insurance protection for the entire life of the insured individual. This is also known as permanent coverage. In addition to this, this type of life insurance carry a cash value until the contract is completely surrendered. Moreover, the premiums are level for the life of the insured individual and at the same time the death benefit is guaranteed for the insured’s lifetime. With whole life insurance, part of your premium is applied toward the insurance portion of your policy and the other party of your premium goes toward the portion, cash or investment of your policy.
This type of life insurance plan is also known as adjustable life or flexible premium. It is also called as the variation of whole life insurance. Just like whole life insurance, universal life insurance is also permanent policy providing cash value benefits that are based on the latest interest rates. Cash values can earn an interest rate that is being set periodically by your insurance company.
This type of life insurance is creatively designed and developed to combine the savings and traditional protection of the whole life insurance with the growth of investment funds. It is composed of two components. The first one is the separate account and the second one is the general account. The separate account is composed of different investment funds within the portfolio of your insurance company that includes bond fund, money market fund and equity fund. The general account is the liability account or reverse of the insurance provider. This is not allocated to the individual policy.
Variable Universal Life
This type of life insurance combines the amazing features of universal life and variable life. It will give you the flexibility of adjusting your premiums, selection of investment choices and death benefits. The policy is classified as securities and subject to SEC regulation. Policies may offer guarantee that the death benefit will be paid to beneficiaries.
This type of life insurance is considered as one of the most usually utilized policies. This will help you to protect your beneficiaries against financial loss. Term life insurance does not build cash values and the maximum term period is 30 years. This type of life insurance is useful when there is a limited time needed for protection and at the same time when the dollars that are available for coverage are limited.
Now that you already know the different types of life insurance, this the best time for you to choose for the best type of life insurance that will suit with your needs, expectations and demands.