Insurance – Types Of Life Insurance To Consider

So you know the importance of quality, and you’ve identified insurance companies that specialize in your specific needs, now it’s time to decide what type of policy to buy.

insurance category

There are many different types of life insurance, including:

  1. Term Life Insurance
  2. Permanent Life Insurance
  3. Whole Life Insurance
  4. Universal Life Insurance
  5. Variable Life Insurance
  6. Final Expense Life Insurance
  7. No Medical Exam Life Insurance
  8. Key Man Life Insurance
  9. Increasing and Decreasing Term Life Insurance
  10. …and more

I’ve broken down 4 of the most popular types of life insurance below.

Term Life Insurance

Term life insurance is so named because it lasts only for a specific period of time, or term, which usually ranges from 10 to 30 years. Most people buy term life insurance to protect their loved ones while they have a lot of debt and/or not much in savings. That way, if they died unexpectedly, their families wouldn’t be forced to sell the house or make other financial sacrifices.

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Because term life insurance doesn’t include an investment component, it is almost always the most affordable coverage you can buy. One major benefit of term life insurance is that your premium shouldn’t change while your policy is in force. Once you “lock it in,” you can count on those premiums for the duration of your policy. The younger and healthier you are when you lock in your rate, the less you’ll likely pay throughout the life of the policy.

The ideal customer for term life insurance is:

  • Someone who wants to protect his or her family from financial losses during their working years.
  • An individual who only needs coverage for a specific length of time (i.e. thirty years).
  • Someone who has not had a chance to save enough money to support their loved ones for 5 to 10 years.

Who should pass:

  • People who want life insurance that will never expire.
  • People who want to purchase a life insurance policy that will build cash value.

Whole Life

Whole life is also aptly named. Once you buy a policy (or commit to funding one), the coverage lasts for the rest of your life. This kind of coverage, which is also called permanent life insurance, adds an investment component as well. The life insurance component is designed to provide for your family when you die, just like term life, but part of the premiums you pay for a whole life policy become an investment with cash value. Like other investments, you can generally borrow against the cash value of your policy with favorable terms.

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The ideal customer for whole life insurance is:

  • Someone who wants to purchase life insurance coverage that will never expire.
  • Someone who wants a policy that will build cash value they can borrow against.

Who should pass:

  • Someone who wants the most affordable premiums money can buy.
  • Anyone who only needs life insurance for a limited term, or length of time.

Universal Life

Like whole life, universal life is permanent. However, universal life combines this coverage with a more complicated investment component. This kind of coverage offers flexible premiums: The amount you pay into your policy can fluctuate from year to year. As a result, your policy may build more cash value some years than others.

The ideal customer for universal life insurance is:

  • Anyone who wants flexibility in their premiums and death benefit.
  • Someone who wants a permanent death benefit that will never expire.

Who should pass:

  • Someone who wants fixed premiums and a fixed death benefit.
  • Someone who wants to keep their premiums affordable.

Variable Life

Variable life insurance is another form of permanent life insurance that offers an investment component that builds cash value. Because variable life insurance allows you to allocate a portion of your premiums to a separate investment account, this type of life insurance is generally more expensive than other types of coverage.

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Due to the way these policies are set up, consumers can decide when to pay higher premiums for a higher death benefit within certain limits. Since you can generally choose from a variety of investments within the investment component of your coverage, and since returns are never guaranteed, variable life insurance is regulated under federal securities laws.

The ideal customer for variable life is:

  • Someone who wants to participate in various investment opportunities without being taxed on their earnings.
  • Anyone who wants the potential for higher returns, but doesn’t mind the risk of losses.

Who should pass:

  • Individuals who just want life insurance for a fixed length of time, usually ten, twenty, or thirty years.
  • People who prefer not to take any risk.
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About the Author

Imaeruaka Joseph .N

Imaeruaka Joseph .N

I believe in sharing wisdom with others. Utilizing life to its maximum and blogging is a call for me . Who is Imaeruaka Joseph? Imaeruaka Joseph also known as Inbuilt-Wisdom JIN, is an indigen of Amesi town, in Aguata local government area, Anambra state. Skills? 1. Copy writer (specialty; sales copy) Currently works with Sky blazer ventures, Niger standard industry ltd, Azodo fish farm. 2. Content creator (short stories, articles, memes and poems) Currently works with Andora Novella, Tis foundation and Medium. 3. Author at Amazon (kindle direct publish) Imaeruaka Joseph up to date has six books published on Amazon. -Marriage forum -Wisdom from its inbuilt -The Compile -Did i have sex? - a memoir -Maintenance of some basic electrical components -The poem stream. Reach out to me via email, [email protected]

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