Overview of the Main Types of Life Insurance
Life insurance has expanded greatly in the past decade. Now, people have many more options available to them when shopping for life insurance. Here is a quick overview of the types of life insurance available.
Term life insurance is the most popular type of life insurance because it lets policyholders buy large coverage for the lowest premium (compared to other types of life insurance). The policy is only valid for a certain term and the policyholder pays a fixed rate during this term.
Whole life insurance covers you until the moment of your death and the rates will not change during the entire time. The life insurance companies will use your premiums for investments and may offer a guaranteed return on the investment.
Universal life insurance will keep you covered so long as you continue to pay the premiums. There is also an investment aspect of universal life insurance. The beneficiaries of the policy will receive the value of the policy and may also receive the value from the investments. With universal life insurance, the value of the policy can change depending on how the investments are valued.
Variable Life insurance is like universal life insurance but policyholders have more options when it comes to investments.
This type of life insurance policy is a combination of term and whole life coverage. Any dividends which the policyholder pays will go towards turning the term life insurance into whole life.
Term universal is a fairly new type of life insurance which combines term and universal life. There are more choices and flexibility with term universal, especially in that you can lengthen the duration of the term even once you are in the policy.Overview of the Main Types of Life Insurance
Business Life Insurance
Business life insurance protects a company, not an individual. The “death” of the company can occur when a crucial member of the business dies or becomes ill, when a disaster occurs that harms the business, or so forth.
Critical Illness Insurance
Critical illness insurance is becoming more popular recently. It gives a lump sum amount in the event that the policyholder is diagnosed with a critical disease, such as cancer. The money can be used for various purposes, such as paying medical expenses or compensating for lost wages.