The Different Types of Life Insurance Policies

There are many types of life insurance available today and choosing one can be challenging. It is essential to evaluate the benefits that can be attained from each cover. There are various features and factors to consider when making a decision with regard to this type of insurance. The concept behind it is provision for loved ones even after death and the dynamics of the beneficiary can be used to determine what cover you should have. Fees and charges, flexibility and the time frame should also be factored in. Consider these types of life insurance.

Whole Life Insurance

This is a policy that is active during the whole duration of the insured individual’s life. The premiums are usually paid annually to the insurance and the primary advantage is that the protection given will not decline in value or expire.

Term Life Insurance

This coverage is available for a predefined and limited period and the payments at a fixed rate. The death benefit s paid after the insured person dies during the specified term. There are different forms of this insurance.

Annual Renewable: This is a simple policy that covers a single year and the premiums paid will be based on the likelihood of the individual dying within the year. Renewing can be challenging especially in the case of terminal illnesses.

Level: In this case, there is a predefined period the premium is guaranteed to remain the same as long as the contract set is still active.

Return Premium: This form of insurance allows the insured to get some of the premiums paid in the case that the policy expires while they are still alive.

Universal Life Insurance

This is a policy that offers permanent life insurance and one can also access the tax-deferred cash value of the cover. The advantage attained is the flexibility in the premium payments, the savings as well as the death benefits.

Variable Life Insurance

This is a permanent life insurance form that provides an opportunity for investment in addition to the death benefits. The insured can invest in separate accounts and these are included in the cash component of the policy. The advantages include the investment options, tax deferral and the guaranteed death benefit.

Variable Universal

This policy has aspects of both the universal and variable life insurance. The variability is in the value accounts in which the insured can invest and the universal aspects allow flexibility in payments of the premium.

Indexed Universal

This is an insurance that will provide death benefits as well as an opportunity to build up the cash value of the policy. It is referred to as the indexed since the increase of the cash value is based partly on the increase in the market indexes. The insured is usually protected from the decline in the markets through minimum interest rates.

Survivorship Universal

This is a cheaper alternative to individual types of life insurance. It provides cover for two people and the benefits can only be paid after they are both gone. It is beneficial to those who want an affordable policy that results in a larger cumulative sum.

Consider individual aspects of each policy such as guarantee of death benefits, flexibility and cash value to make certain that you have the best cover that suits the needs presented.

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