What Type of Life Insurance Policy is Best For You?
You have determined that it is time to purchase a life insurance policy to protect your loved ones. A good choice. A smart choice. Now, you’re confronted with numerous quotes for different types of life insurance, none of which offer the same terms and charge various amounts of premium. Which one is right for you?
You now have many options for life insurance, and each one has benefits, and features as well as pros and cons. But look closely at each. The choices you make for a life insurance policy greatly affect the amount of premium you will need to pay each month, and the amount of benefit you want your beneficiaries to receive.
Would You Like Cash Back With That Policy?
Insurance companies have developed different life insurance products that suit different needs for different people. But likely there is a good life insurance policy out there for you. Some have a savings element that retains a “cash value” with your policy from which you could even request a loan. With other types of life insurance you simply pay a monthly or yearly premium and never see that money again.
Below is a rundown of the three most widely purchased types of life insurance and the benefits of each.
Term Life Insurance
The most popular type of life insurance purchased today is term life insurance. Like the name implies, term life insurance is a contract for a certain period of time. Based on your age and health, you agree to pay an insurance company a level premium until you reach the end of the term of the contract, or until the unlikely case of your death.
Term insurance offers you a cheaper premium that other types of life insurance for a reasonable benefit amount for your chosen beneficiary.
Whole Life Insurance
Whole life insurance was designed for the insured to accumulate a cash value with the policy as long as the premiums are paid regularly. The premium for whole life insurance is more than term life, but the extra funds you pay are invested by the insurance company. You, in turn, are provided a small investment return into your policy account.
At some point a cash balance could be useful. For instance, you could borrow funds from your whole life insurance, much like taking a loan from yourself. Also, when your policy ends or you choose to cancel your whole life insurance, you may receive your vested amount of cash value earned on your policy.
Universal Life Insurance
A universal life insurance policy is similar to a whole life insurance policy but is designed to give you flexibility in the amount of monthly premium you pay. Some months you may pay more and the extra money goes toward a higher savings and interest returns. Or you may find that you are struggling financially and wish to pay less each month for a while.
This article was intended to give you a better idea about the main types of insurance products you are likely to see. Asking for life insurance quotes is easy and FREE with GetInsuranceQuotes.org. But if you are unsure about your financial situation and what you require for a life insurance benefit, talk to your insurance agent who can do a thorough analysis of your needs and offer you one-on-one advice.
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