Different Types of Life Insurance

With permanent and term life insurance, there’s a variety of types of policies for you to choose from. Which life insurance policy is the right one for you and your family? That depends on quite a few factors, including the length of time you need the coverage for, what you want to pay for it, and whether or not you’re in search of a policy that builds in cash value with the passing of time. To make things a bit easier for you, we’ll take a look at each and hopefully, you’ll find the one you need.

Guaranteed Issue

This type of insurance is sometimes called no exam life insurance because it doesn’t require you to get a medical exam in order to purchase it. There aren’t any sort of health questions to answer either. In a nutshell, you can’t be turned down for this type of coverage as long as you happen to be within the age range required, which most of the time, is 40 – 85.

Term Life Insurance

When it comes to term life insurance, it’s generally sold in a variety of lengths if time, such as 5 years up to 30 years. The amounts of coverage will vary depending on the actual policy but can actually be up to millions of dollars. If you get the “Level Premium” type, it locks in the same premium price for the length of the entire policy. The “Annual Renewable” type is actually a single-year policy that you can renew each year. These can be useful for those who have short-term debts or who only need coverage for a short amount of time.

Whole Life Insurance

This type of insurance generally lasts until you die, as long as you keep up with the premiums. Whole life insurance is as close as you can get to ‘set it and forget it’ when it comes to life insurance. Most of the time, your premiums will stay the same and you’ll get a guaranteed return on the cash value of the policy. Also, the death benefit amount won’t change. 

Universal Life Insurance

With this kind of life insurance, the death benefit is guaranteed and the premium won’t change. Generally, there’s little to no cash value associated with the policy. Also, insurers demand that your payments are on time. However, you are able to choose how old you want the death benefit guaranteed. For example, you can choose it to be guaranteed until you’re 95 if you like. 

Group Life Insurance

This is generally offered by employers and will be a portion of the work benefits for employees. The premiums are based on the entire group of workers as opposed to on each individual. Most of the time, employers will offer this basic coverage for free, and then give you the option to purchase supplemental insurance if you’d like additional coverage. 

Mortgage Life Insurance

This covers the balance of a home mortgage and will pay out to the lender as opposed to your family in the event of your death.

In the end, all of the diverse types of life insurance will fall under two distinct categories: Term life insurance and permanent life insurance. Term life policies last for a set amount of time and are typically suitable for most people. If you don’t happen to die within the specified time period, the policy will expire and there won’t be a payout. 

Permanent life insurance policies will last for the length of your life and typically have a cash value that you may borrow against while you’re alive. 

If you’re in the market for life insurance, do your research so that you’re able to get the one that suits you best.

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