Types Of Life Insurance
What are the different types of life insurance? It is very important that we have insurance policies in our pockets. This is because these policies serve as a safety net to us when something bad happens. Among the many kinds of insurance policies, most people these days are getting life insurance. This is because this makes sure that the people they love will not have financial troubles when the insured passes away. There are many different types of life insurance. They differ in payment methods and benefits in general. Make sure that you know the different types of life insurance so that you can get the one that will give you the best convenience.
The most basic of the types of life insurance is the term insurance. As the name implies, these are types of life insurance that takes effect in a term. This is temporary. When you get a term insurance policy, you will be asked to choose a certain term. It can be 10, 20, 30, or 40 years. If you die during this period, your beneficiaries will get the amount specified on your policy. The problem with this is that when you die outside the term you have chosen then no one will be able to get the insurance money you have earned. Among all the types of life insurance, this one doesn’t have a component of investment.
The whole life insurances are types of life insurance that are much like the term insurance but only differ in the coverage period. As the name implies, the period that the whole life insurance covers is your whole life. The premiums that you will be required to pay here will remain the same the entire time. A part of this premium will go to a certain investment to the insurance company. The thing is that many of the insurance companies will tell you that they have low rate of guaranteed return. However, in reality, you may tend to pay more than the rate that is guaranteed.
Third, we have the universal life insurance. These are types of life insurance wherein you are the one to decide how much premiums you will be able to pay. However, in these types of life insurance the insurance company will choose for you a certain investment vehicle. The investments you make as well as the returns you acquire will then go into an account of cash value. You can then use this account to pay premiums or you can use them to build.
Lastly, we have the variable life insurance. These are types of life insurance that are actually a variation of the universal life insurance. Here, there is a wide variety of insurance products. You will be given the free choice of which product you want to invest to. One of the most common investment products chosen in variable life insurance is called stock funds. Here, in types of life insurance, your investment returns can be sued to offset the main cost of the premiums that you have. Your beneficiaries will then either get the policy face value of the policy face value as well as the cash amount of your investment.