Types of Life Insurance
There are two major types of Life insurance - Whole and Term Life.
Whole life is sometimes called permanent life insurance, and it encompasses several subcategories, including traditional whole life, universal life, variable life and variable universal life. Whole life insurance premiums are more expensive than term premiums because some of the money is put into a savings program. Whole life insurance provides a death benefit for as long as you live provided the policy is properly funded.
Term Life Insurance is the most straight-forward type of life insurance and the easiest to understand. Term life insurance offers the most affordable life insurance coverage for your family. It is one of the best values in the entire financial services arena. Where else can you get fifty-thousand dollars in protection for so little?
Term life is often referred to as “temporary” insurance. A term life policy will only pay benefits if you or a loved one passes during the time you're covered. You can decide on the number of years you wish to have coverage in place and pay the premiums for that term.
Since it can be purchased in large amounts for smaller initial premiums,
term life insurance is well-suited if you have short term financial responsibilities,
such as providing extra insurance protection during child-raising years.
Insurance proceeds can be used to pay off a home mortgage, college loans
and other debts if you die before these financial obligations are met.