The Types of Life Insurance

This article is going to be short and simple. Basically, I’m just going to break down the types of life insurance that are available to you.

1. Term life insurance
Term life insurance is the most common type of life insurance. Most people opt for term life insurance because it is the cheapest option and yet still provides adequate protection. It provides protection for a specified period of time. The death benefit is only paid if the insured dies during that specified time.

2. Whole life insurance
Significantly more expensive than term life insurance, whole life insurance is usually recommended for those with higher incomes and are older. Whole life insurance provides lifetime coverage with a guaranteed death benefit. The guaranteed death benefit provides you with a minimum payout no matter what. As long as you pay your premiums, you will keep your whole life insurance for your lifetime.

3. Variable life insurance

Variable life insurance provides investment opportunities but does not provide a guaranteed cash value. Like whole life insurance, variable policies also are permanent policies, meaning they stay with you for the duration of your lifetime as long as your premiums are paid.

4. Universal life insurance

Like whole life and variable life insurance, universal life insurance is a permanent policy. It provides a cash value. Universal life insurance is unique in that premium amounts are flexible within a certain range.

5. Variable Universal life insurance

A combination of universal and variable life insurance, variable universal life insurance provides flexible premium payment options as well as a range of investment options. However, the downside to variable universal life insurance is that the wide range of investment options means there is also more risk involved.