Read of the different types of life policies including term, endowment, whole, universal and variable coverage and how and where to buy these policies.
The various Types of life Insurance
Life insurance is a coverage that pays out a sum of money to beneficiaries of an insured person. Payment takes place at the time of death or on a set time period. Its primary goal is to provide a measure of financial security and protection for the people who remain after you die, typically your family. This topic should therefore be high on your agenda.
A life insurance policy, like health insurance, is a contract made with an insurance companies you would typically choose based on your needs and goals. The main types of life insurance coverage are as follows:
Term life insurance
A term life insurance policy pertains to the basic coverage which generally does not build a cash value over time. Consumers buy it for the purpose of death benefit protection within a specific period of time. A term policy however has other benefits. Premium payments for term life insurance policies are usually lower than other types, since the policy only provides the death benefit coverage only for a certain duration. Later on, a term policy may be extended or converted into another type of coverage. However, rates on term policies may continue to increase as you grow older.
Endowment policy Policies
A life insurance contract that ultimately pays a lump sum after maturity. This is done once its specific term is fulfilled, or at the time of death. Policies mature at 10-20 years or up to other agreed age limit, while some policies pay out at time of critical illness. An insurance agent may require a medical exam before approval of a policy. If medical report does not meet requirement there will be return of premium paid.
Whole life insurance Policies
As its name implies, this type of life insurance provides a lifetime death benefit involving a set premium amount. This however builds cash value which you can make use of while you’re living. This type of policy defers from the variable universal life insurance coverage, described below. Consumers receive cash values and benefits in exchange for fixed premiums.
Universal life Insurance Policies
This is a permanent life insurance policy which is more flexible, combining term insurance with a money market-type investment. Universal life insurance gives the added benefit of earning market rates with potentially higher returns.
Variable Life Insurance Coverage
Variable life insurance is a permanent policy that can avail as an investment fund. This fund links with a money market mutual-fund such as stocks or bonds, where returns are not guaranteed. Persons may also consider buying a variable universal life insurance policy.
How and where to buy different life policies?
You may follow this simple checklist as a guide to find the one that perfectly suits you and your family:
- Determine the cover you really need by adding up your debts and expenses that you want to insure.
- Factor everything like your age, life stage, current situation, financial status, marital status, and other important things. If you’re married, you may want to consider your wife or husband’s opinion.
- Go over the various types and plans, then pick what falls within your capability to consistently pay monthly premiums.
- Designate a beneficiary to the right person whom you trust and keep this information up-to-date.
- Perhaps the easiest way in today’s modern times is simply getting on the web to buy coverage online. This makes it easily accessible as it gives the freedom to browse different insurance types. You can perform a thorough comparison and find the best value for your money. Get life insurance quotes online today. Ensure however that you buy from a reputable and reliable life insurance company prior to finally making your decision. The type of life policy you choose will depend on your personal preference. Need to learn still more on life insurance?