Life Insurance
Life insurance is one of the most important investments a person can make. This type of insurance gives people a way to provide for their families once they have passed. They can help their family by paying off outstanding bills such as a mortgage or credit card bills. The following is a list of the types of life insurance policies:
Term Insurance: Term life provides a death benefit for only a specified period of time. If one dies during the coverage period, the beneficiary will collect the death benefit. If a person lives beyond the set term period, the coverage will end and the policyholder will not get any of the money back. The number of years of coverage can range from one to thirty. Term life insurance is the most affordable insurance choice for young and healthy people. It is important to remember that if the policy expires and you want to renew, you will have to pay a higher premium because you will be much older, and maybe even have some health problems.
Whole Insurance: This type of insurance contains a fixed premium and is considered the most simple permanent life insurance policy. The premiums are paid once each year. It has a savings element that earns cash value. When making premium payments, one will pay more than is required to cover the current costs of insurance coverage. The surplus payment is put in a cash value account. The policyholder has no say in where the money is invested. Whole life insurance will remain intact for as long as the person is alive.
Universal Insurance: With this type of insurance, reducing or increasing premiums will effect the growth of the cash value element and maybe even the death benefit.
It allows the policyholder to transfer funds between the insurance and savings parts of the policy. The Premium rates are flexible.
Variable Insurance: This policy gives the policyholder control over how often and how much the premium payments will be. There is no guaranteed minimum cash value or death benefit. As well, this type of policy gives the policyholders control over where their savings are invested. This policy contains a number of investment choices called sub-accounts which are managed by professionals. If the cash value account goes over a specific amount, the death benefit will increase. Premiums with this policy are fixed.
Universal Variable Life: With this type of policy, the flexibility of universal life is combined with the investment control of variable life. The amount of the final death benefit and cash value depends on investment performance.