Types of Life Insurance

Life insurance is vital for anyone now-days given the kind of stress that you see in jobs and life in general. People often succumb to modern day illness and those that suffer the most as a result of a series or fatal illness are the near and ear ones.

Before you go ahead and take out a life insurance policy you need to be aware of the types available to you so that you can make an informed decision on which one to take up. Here is a look at the different insurance policy types:

Term Life Insurance – Here life insurance coverage spans for a set term, after which it expires. The mentioned beneficiary in the policy receives payment in the event of the policy holder’s death. Premiums charged can go up during the term period, however they are not high.

Whole Life Insurance – This policy applies for a person’s entire life. The money invested into premiums can be put into investment which will yield dividends. Such dividends can be used to pay the premiums. Withdrawals are possible for premiums paid. Policy pays out in the event of death to mentioned beneficiaries. However, compared to the term life insurance policy, it is more expensive. Premiums are fixed.

Universal Life Insurance – It offers more flexibility in its features than whole life insurance. Premiums paid are not taxed. Withdrawals and loans are possible for premiums paid. Policy pays out in the event of death to mentioned beneficiaries. Premiums and cash value of the policy are variable.

Universal Variable Life Insurance – This policy type offers flexible features. Money paid as premiums can be invested by the insurance company into investment such as stock, money market, and bonds and is offered by the insurer. Withdrawals and loans are possible for premiums paid. Policy pays out in the event of death to mentioned beneficiaries.

Joint Life Insurance – Here two people take up a single policy instead of two separate life insurance policies. Couples and partners are usually seen to opt for this policy type. Premium charges apply separately for both the insured with the younger of the two having to pay more. In the event that one of the policy owners dies, the survivor receives a payout.

Within each category or type there will be sub categories, which are set by the insurance company. Before you opt for any policy type or subcategory, make sure to read all aspects of the policy and the conditions under which it will pay out to your beneficiaries. This way you can be sure that the policy you choose suits your requirements.