Deciding on a life insurance policy can be hard, but we’re here to make it easy for you. You might be wondering, “What type of life insurance is right for me?” And that’s where we come in. Our life insurance agents will create a customized policy that matches both your needs and your budget. Learn more about the different types of life insurance below:
Term Life Insurance
Term life insurance is the simplest form of life insurance to understand. It pays loved ones (your spouse, children, beneficiaries) a fixed amount of money if you die. However, this policy isn’t worth anything unless you die during the course of the term. Say you buy a 15-year term life policy with $500,000 in coverage. You’ll make a monthly payment for 15 years. If you die during that 15 years, your family will get a check for $500,00, which is called a death benefit. The advantages of term life insurance are that it’s less expensive than other plans, and it’s more flexible. For many people, term life insurance is a simple and affordable way to safeguard the financial health of their loved ones if something happens to them.
Permanent Life Insurance
Permanent life insurance is trying to do two things: provide the benefits of life insurance and be an investment account. This type of life insurance includes a cash value, which you can think of like a savings account. It’s a pool of money that you own and can access or borrow against. The longer you have the life insurance policy, the more cash value it has. Unlike term life insurance, permanent life insurance policies don’t expire. The policy continues for as long as you pay your premium or until you die.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance. For whole life insurance, you lock in the premium amount for as long as you want the policy. Each month, you’ll pay your premium, and a portion of that premium goes into the cash value. The cash value will continue to grow over the whole life of the policy. Therefore, the longer you own the policy, the more cash value it has. Some benefits of whole life insurance are that it won’t expire or go down in value, and the rate you pay will never increase. It also has a guaranteed death benefit, which means the amount of money your loved ones receive when you pass is guaranteed.
Universal Life Insurance
Universal life insurance is another type of permanent life insurance. It is similar to whole life insurance in that it has both a death benefit and a cash value. The difference is that universal life insurance policies offer adjustable premiums. This means you may be able to access some of the cash value to adjust your yearly payment. Depending on how much potential cash value you have, you might be able to eliminate a premium payment. The benefit of this is that it offers more flexibility than whole life insurance. As your financial circumstances and responsibilities change, you can increase or decrease premium payments. Another benefit is that the cash value grows at a variable interest rate, which could yield higher returns.
Variable Universal Life Insurance
Variable universal life insurance is a life insurance policy, a savings account and a mutual fund all at once! With this life insurance policy, you get to decide how your cash value is invested. You’ll have investment options to choose from, but because you’re in control of where the money is invested, you bear the risk of the investments, not the insurance company. Some benefits of choosing this life insurance policy are high-quality investment options for more growth potential, permanent life protection, and a flexible death benefit.
More Types of Life Insurance Policies
We’ve listed some of the most common types of life insurance policies above, but those are just some of the many options you’ll have. There are also joint life insurance, survivorship life insurance, final expense life insurance and more. Although all of this info might seem complicated to understand, our experienced life insurance agents are here to make it easy for you. We can match you with the right policy for you and your loved ones and help you understand what all of it means.
To get started, request a free online life insurance quote.