No one likes to think of something happening to them, but it is an inevitable fact that we can go out unexpectedly anytime. And, if something were to happen, we wouldn’t be able to provide for our family anymore. That is why life insurance exists – for us to prepare for the unexpected and make sure that there is something we could leave behind for our loved ones.
Life insurance quotes are easier to check out nowadays because practically everything is available online. In just a matter of seconds, you can see all the options that you have on one page. But before shopping for life insurance, it is important that you know what you want and what you need to make sure that you are able to take care your family’s well being just the way you want it. In order to do that, let us take a look at the different types of life insurance.
Whole Life Insurance
This type of life insurance provides permanent coverage. This means that insurance protection is provided to the insured for his or her entire life.
With this type of insurance policy, part of your premium goes toward the actual insurance of your plan, another goes toward administrative fees, and the balance of your premium goes to the investment portion of your policy. The accumulated interest is tax-free until you withdraw it, if it is allowed according to your policy’s terms.
Universal Life Insurance
This type of life insurance is also known as flexible premium, and is what we can consider the cousin of whole life insurance. It also provides permanent coverage and cash value benefits from the accumulated interest rates.
What differentiates it from whole life insurance is that the premiums, cash values, and amount of protection can be adjusted during the contract term. You can earn an interest rate from cash values and it is set periodically by the insurance provider with the guarantee that it will not drop below a certain level.
Variable Life Insurance
This type of life insurance is the combination of the protection of traditional insurance and the savings features of whole life insurance.
It is composed of the general account and the separate account. The general account is the reserve account of the insurance provider, while the separate account is for the investment funds, such as an equity fund, a money market fund, a bond fund, or some combination of these.
Variable Universal Life Insurance
Like stated in its name, this is the combination of universal life insurance and variable life insurance. It allows the consumer the flexibility of adjusting premiums and selection of investment choices.
Term Life Insurance
Term life insurance is one of the most common of policies. It can help protect your beneficiaries from financial loss, but it only provides protection for a limited period of time. The maximum term period is usually 30 years. This type of policy can have some variations, such as level term and decreasing term.
Knowing the type of health insurance you want is key before beginning to shop around. That way you can make sure you are getting the coverage that is best for you and your loved ones.