There are two main kinds of Life Insurance coverage a person can take when selecting Life Insurance that is suitable for them—Term Life and Whole Life! These two types encompass several different coverages that we will go over in this short list!:
Term Life Insurance
Term Life Insurance is usually thought of as the simplest form of Life Insurance, and with this coverage it only pays out if death occurs during the term of the policy! Policies usually only last from 1-30 years and don’t usually come attached with extra Benefit Provisions! There are two types of Term Life Insurance: Level Term—which means the death benefit stays the same through the duration of the policy! The second is the less common: Decreasing Term—which means that the benefit decreases slowly over the life of the policy!
Whole Life Insurance
Whole Life Insurance is coverage that if you pay your premiums on time it will pay a death benefit when you die—even if you end up living to 100! With Whole Life insurance there are three categories of coverage: Universal Life, Variable Universal Life, and Traditional Whole Life!
Traditional Whole Life is a Life Insurance Policy that the benefit and premium is designed to stay at the same level through your life—this is a benefit since if the premiums went up as someone got older they some people wouldn’t be able to afford it at a certain point!
Universal Life Insurance is a coverage that is flexible with changes to increases to the Death Benefit amount, changes to premium payment amounts if the cash value of the policy has gotten high enough—which can be a useful tool during times of economic uncertainty like what’s happening now in 2020!
Variable Life Insurance is a coverage that has an investment aspect and are able to invest in stocks, bonds, and mutual funds in order to help increase the amount the policy is worth! The risk is if the market does not perform as expected you may not have as high of a death benefit in the end!
But if you have questions as to which coverage is best for you, it’s always best to give your agent a call and see what kind of advice they can give!