Types of Life Insurance you can Buy

When in the market for life insurance one can be over run with the number of companies to choose from, differences in rates, whether a medical exam is necessary, etc. Once finished looking at all the readily available information you may be confused as to what type of life insurance you really need. Before you purchase a life insurance policy you should know the types of life insurance available to you. The most common types of life insurance are term life or whole life. These are not the only choices you have when in the market for life insurance but they are the more common forms you will see and hear about. Aside from term and whole life polices you also have variable life, universal life, and universal variable life policies to choose from. Understanding the differences in these types of life insurance can help you make the best decision in your search for life insurance.

First we will take a look at term life policies. Term life is a very common type of life insurance that you often see advertised on TV, flyers, mailings, etc. A term life policy is the least expensive type of life insurance available. Term life policies have no cash value. In the case of the insured’s death term policies pay the lump sum of the policy to the beneficiary. Term life rates often vary according to age. The older you get the more your policy costs. Gender may also affect the cost of a term life policy.

Whole life insurance policies offer life insurance as well as cash value. Whole life policies cost more than term policies but offer the benefit of a locked in rate for as long as the insured keeps the policy premiums paid. Upon the death of the insured the beneficiary will receive the amount of insurance offered in the policy. As long as the insured is living they have the cash value of their policy. Should a living individual cash in their insurance policy they will only receive the cash value their policy has available which will be much less than the amount that would be received upon their death.

Variable life insurance like whole life insurance has a cash value. This type of insurance allows for more flexibility than a whole life policy in regards to the cash value the account has. An individual with a variable life insurance policy can borrow from their policy during their lifetime.

Universal life insurance allows the policyholder to earn interest on their cash value account as well as have access to their cash value account during their lifetime. This type of insurance offers both premium and face value flexibility. A universal life insurance policy offers great protection but may be a bit costly.

The last of the types of life insurance we will discuss is the universal variable life insurance. This type of insurance gives you more control over the cash value of your insurance than any of the other insurance types. Universal variable insurance works best if you invest more into your policy than if you take a lesser policy. You must manage your own accounts it will not be done for you. The account will allow you to invest your cash value in items such as stocks, bonds, etc. You can also borrow from the cash value of your policy while living. Should you terminate your contract earlier than the agreed upon timing your cash value may be less than had you allowed the policy to mature.

Now that you know a bit about the types of life insurance and what they will and will not allow you to do you can make a more informed decision on the type of policy that is right for you. Life insurance is important to have not only for your own benefit but also more over for the benefit of your family. If something happened to you how would your family meet their expenses and pay for your funeral? Choosing the right policy can save your family from money woes in the instance that something should happen to you. Life insurance is an investment that we often put off thinking that we will not need it when in truth we never know when we could need it. Make the wise and safe decision to protect your family today.