Life insurance is a modern-day necessity, especially if you have people who depend on you or will have debts that are due when you pass on. Insurance companies have many different life insurance types that serve the needs of people at the different stages of life, from young adults just starting a family to seniors who want to leave something for their heirs.
The biggest distinction between different life insurance types is whether the insurance is term life insurance or permanent life insurance. Term life insurance provides only a death benefit for a specific period of time, and then it is gone. In contrast, permanent life insurance lasts for the entire life of the insured and builds up a cash value over time. While term and permanent life insurance are the two major categories, there are many other nuances of life insurance types that are targeted toward specific groups of people.
Whole life insurance is a type of permanent life insurance that covers the policyholder for as long as they continue to make their premium payments. Unlike term life insurance which provides coverage for a predetermined number of years, whole life insurance can provide death benefit coverage for as long as the policyholder lives.... read more about Whole Life Insurance
Permanent life insurance, as opposed to term life insurance, lasts for the entire life of the person who is insured. The other biggest difference between term life and permanent life insurance is that the latter builds up a cash value as monthly premium payments are made. In essence, a permanent life insurance policy is a combination of a life insurance policy and a savings plan.... read more about Permanent Life Insurance
The most basic type of life insurance is known as term life insurance. This insurance provides a monetary benefit to a beneficiary upon the death of the policyholder, and nothing more. Term life insurance pays out only if the policyholder dies within the length of time that is specified when the insurance policy is originally purchased.... read more about Term Life Insurance
Smokers and users of other tobacco products often put off purchasing life insurance products due to the fear of sky-high premium costs. Life insurance companies use actuarial data when assessing death rates and setting their premium prices, and it is undeniable that smokers have a lower life expectancy as compared with nonsmokers. This is why smoker life insurance costs more than life insurance for nonsmokers.... read more about Smoker Life Insurance
Universal life insurance, like whole life insurance, is a variety of permanent life insurance. As with whole life insurance, universal life insurance policies build a cash value through the portion of each month`s premium payment that is invested rather than paying for the cost of the insurance policy. Unlike whole life policies, the savings portion of a universal life policy is invested more aggressively in vehicles such as money market funds, bonds, and mortgage-backed securities; this leads to the likelihood of higher earnings. Universal life policies return interest to the policyholder instead of the dividends that they would receive through a whole life policy. The actual amount of interest paid to the policyholder can vary, but most insurers offer a minimum rate guaranty.... read more about Universal Life Insurance
Variable life insurance is a type of permanent life insurance which provides a monetary benefit to your beneficiary after you die. This life insurance is called ~variable~ because you can allocate a portion of the premium you pay toward investment options like stock funds, bond funds, or money market funds that are held by your insurance company in an investment portfolio. Because these different investment options can vary in their values, the cash value of your variable life insurance policy can also vary.... read more about Variable Life Insurance
Mortgage life insurance, which is also called mortgage protection insurance, is a type of life insurance that fully pays your mortgage loan in the case of your death. For example, if the mortgage loan on your home is a 30-year $400,000 mortgage, then it would be appropriate to obtain a mortgage insurance policy that would pay a $400,000 death benefit. This way your beneficiaries do not have to worry about making mortgage payments in the event of your passing.... read more about Mortgage Life Insurance
Senior life insurance is a life insurance product that is geared toward older people and usually carries a smaller death benefit than other types of insurance policies that are designed for younger people. Traditionally, the age at which people qualified for senior life insurance was 65, but now the age requirement varies by insurance company. Some insurers offer a senior life insurance policy for sale to adults who are as young as 50, which is somewhat ironic, since the average life expectancy has increased over the past several decades.... read more about Senior Life Insurance
Return of premium life insurance is a type of term life insurance that not only provides a death benefit, but features the return of the money paid as premiums when the term expires. This type of term life insurance product is particularly appealing to people who want to be covered by a life insurance policy but hate the idea that they make annual premium payments which are of no benefit unless they die. While permanent life insurance such as a whole life policy offers some additional value for the annual premiums, it can be considerably more expensive than return of premium life insurance, and many people like to have more control over their investments than is allowed with permanent life insurance.... read more about Return on Premium (ROP) Life Insurance
Survivorship life Insurance, which is sometimes called second to die life insurance or joint survivorship life insurance, is a type of insurance policy that insures the lives of more than one person. Typically used by a husband and wife, survivorship life insurance offers a death benefit, but this benefit is not paid to the policy`s beneficiaries until after the death of the second person who is insured under the terms of the policy.... read more about Survivorship Life Insurance
Annuity life insurance may sound like a complicated type of insurance, but it`s not as difficult to comprehend as some people believe. An annuity life insurance policy provides protection against living longer than your financial assets last. The specific features may vary somewhat, but the basic premise of an annuity is that you pay a set amount to an insurance company, and in return, they pay you a set monthly amount. Most often annuity life insurance is deferred, meaning that a number of years pass between the purchase of the annuity and the point where you begin receiving payments. In contrast, an immediate annuity starts paying you back immediately after its purchase.... read more about Annuity Life Insurance
Group life insurance provides coverage for the lives of a group of people, such as the employees of a business or the members of an association or a union group. A single group life insurance policy, which is called the master group policy, covers each person within the group, and the holder of the policy is often the employer or the group entity such as the association or union itself.... read more about Group Life Insurance
