What Are the Different Life Insurance Policies Available?

Life insurance is a means of securing the future for the family in the event of the death of the insured. It will make the insured feel safe and secure in the knowledge that his or her family or business will be protected in case of his or her death. It is also something that is closely associated with aggressive salespersons, and a great bit of confusion as to what exactly is the best policy to buy.

Whole Life, Term and Universal

Anyone who is interested in buying life insurance should first study the different policies available and then make a decision based on solid realities which will make you feel secure as well as satisfied with the decision arrived at. There are a number of different life insurance policies available including whole life, universal life, and term insurance.

Whole life insurance is an insurance that is permanent, and it stays in effect during the insured’s entire life as long as premiums are paid up. The cost of this form of insurance may be more than term insurance, but it remains the same thereafter. There is also scope for a savings option that allows the insured to borrow money against it.

Another form of life insurance is known as universal life which is similar to whole life insurance, but there is no need to renew the policy, and the premiums also stay constant. It has a provision for a savings plan that can be an extra to the policy, and the policy may also be surrendered and exchanged for the accumulated savings. There are also options to add another person, use the savings to pay the premium as well as managing the investments. But all this flexibility as well as many options comes with a price tag that makes this form of life insurance the most expensive of all.

Term insurance does not cost much, and is the cheapest life insurance option, and is usually selected for a period of time (term) that could be one, five, ten or more years. This type of insurance will suit young families that have dependents as well as high debts for which they do not expect to be responsible fifteen to twenty years down the line at the time of maturity of the policy. There is, however, no cash value to this form of insurance and renewing the policy on its expiry will entail paying higher premiums.

Knowing these different life insurance types should help a person choose one that meets the budget requirements as well as offers the most benefits.

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