Life insurance is an important investment that can provide financial security for your loved ones should you die prematurely. If something happens to you, life insurance can help your family cover expenses like funeral costs, debts, and ongoing living costs.
There are many types of life insurance, each with different features and benefits. Today, we’ll examine some of these various types of life insurance so you can make the best choice for your needs when shopping for affordable life insurance quotes.
Term Life Insurance
Term life insurance policies are temporary life insurance policies that provide coverage for a specific period of time, or “term.” These policies are typically less expensive than permanent life insurance policies and are a good option for those who need coverage for a limited period of time.
Most term life policies have a stated duration of 10, 20, or 30 years. However, it is also possible to purchase a policy that has a duration of 5 or 7 years.
When you purchase a term life policy, you will specify the duration of the policy, as well as the amount of coverage you need. The policy will provide coverage for the specified period of time and will expire at the end of that term.
If you die while the policy is in effect, the policy will pay out a death benefit to your beneficiaries. If you do not die during the term of the policy, it will expire and you will not receive any benefits.
Term life insurance is a good option for those who need coverage for a limited period of time, such as those who are in between jobs, or those who are waiting to purchase a permanent life insurance policy. It is also a good option for young adults who are just starting out and do not need coverage for a long period of time.
Permanent Life Insurance
Permanent life insurance is a type of life insurance that remains in force for the life of the policyholder, as long as premiums continue to be paid. These life insurance policies typically have a higher premium than term life insurance policies but offer a death benefit that is guaranteed to remain in force for the life of the policyholder. There are two primary types of permanent life insurance, which are whole life and universal life insurance.
Whole life insurance means that the policy will stay in force until you die, as long as you continue to make the required payments. The policy also builds up a cash value over time. This cash value can be accessed at any time and can be used to help pay for things like retirement or college expenses.
Universal life insurance has more flexibility than whole life insurance. With universal life insurance, you can change the amount of your premiums and the amount of your death benefit. You can also access your cash value at any time. This flexibility can be helpful for people who want more control over their life insurance policy.
Variable Life Insurance
Variable life insurance policies are another type of permanent life insurance that comes with a cash value account. The cash value account grows over time as the policyholder makes premium payments, and can be used to pay premiums in the future, provide living expenses during retirement, or be cashed out at any time. The death benefit amount provided by a variable life insurance policy is also variable and depends on the performance of the underlying investments within the cash value account. If the investments do well, the death benefit will be higher than if they perform poorly.
Survivorship Life Insurance
Survivorship life insurance is a type of life insurance that pays out benefits to the insured’s beneficiary after the death of the insured. The policy is typically purchased by married couples, and the benefits are paid out to the surviving spouse upon the death of one spouse. Survivorship life insurance policies are also sometimes used to provide estate planning benefits, as they can be used to pay estate taxes upon the death of one spouse.
There are many types of life insurance policies, and each offers different coverage. Altogether, life insurance policies provide peace of mind, financial security, and a way to protect loved ones in the event of a death. So, consider all of these various life insurance policies to choose the best one for your needs.