The Different Types of Life Insurance Policies
A good life insurance policy can provide us with peace of mind and your family with the financial assistance they will need later. Before taking out a life insurance policy, it’s important to understand the principal types of life insurance and how you can benefit from them. When it comes to purchasing life insurance policies, it’s important to understand the two types- term and whole life. Also known as permanent life insurance, whole life can cover a wide range of categories including traditional whole life, universal life, variable universal life, and variable life. Whole life insurance can offer benefits over time while term can be useful if your budget requires you to pay a smaller premium. Helpful Information About Term Life Insurance Term life insurance is the most basic type of policy out there. While it may be more affordable and easier to obtain, this insurance can still provide your beneficiaries with the financial assistance they need once you are gone. According to reports from 2003, about 6.4 of all life insurance policies purchased that year were term plans. To receive the benefits of a term insurance plan, the death must take place during the term of the insurance policy, which can range from 15 to 30 years or more. Typically, most term life insurance plans do not have any additional benefits that the individual can use while they are alive. Level Term and Decreasing Term Life Insurance Policies There are two types of term life insurance. These are known as level term and decreasing term policies. With the level term policy, the death benefit doesn’t change over time. Those who have a decreasing term life insurance policy will see their death benefit drop a small amount each year. What You Should Know About Whole Life Insurance Whole life insurance can offer several benefits to the individual whose name is on the policy and their beneficiaries. It will pay out a death benefit at any time, regardless of the individual’s age. For that reason, whole life insurance policies are usually much more expensive than term policies. There are three main types of permanent life insurance policies. They include traditional whole life, universal life, and variable universal life. However, there can be variations of each type depending on the company that you choose.Traditional Whole Life Traditional life insurance is the most common form of whole life insurance. It provides you with coverage for your entire life, and your beneficiaries are guaranteed to receive a set amount in the event of your death. With a premium that remains the same amount, traditional whole life insurance plans allow you to build up cash value, that you can borrow from if needed.Universal Life Universal life insurance is a policy that is flexible and offers low-cost protection similar to a term life plan. It also includes a savings or cash value element. This type of policy is often a good investment for young adults, or individuals who need a lower priced premium for their whole life plan. Variable Universal Life Variable Universal life insurance is another policy that has a cash value option. The difference with this type of policy is that it can have sub-accounts that work similar to mutual funds. These accounts can provide exposure to stocks and may offer an increased return that one couldn’t receive from a traditional whole life policy. The Benefits of Whole Life Insurance There are several benefits that make whole life insurance a desirable choice over term insurance. With a fixed death benefit and premium, you don’t have to worry about paying out more just because you get older. And your family will always receive the same amount. Whole life insurance allows you to take out a loan against your policy if needed, and you have a guaranteed rate of return. Finding the Right Life Insurance Plan Life insurance is a necessary product that allows you to help your loved ones even if you are no longer with them. With a variety of policy options available, it is easier than ever before to find a life insurance plan that will meet your needs. Term life plans can be useful if you want to have peace of mind, but can’t afford a permanent life plan. And whole life insurance plans can be a worthwhile investment with a broad range of benefits that you can take advantage of now. Since we all have different life insurance needs, it’s a good idea to discuss the different options available to you with an insurance agent before you take out a new life insurance plan.We’re Here to HelpCall our office at (850) 942-7760 to learn more about all of our personal insurance options.Demont Insurance Agency, Inc. The Insurance You Need, The Assurance You Deserve.
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