Types of Life Insurance

Finding the best life insurance plan can be challenging because of all the options available. Many people in charge of finding plans for their company often feel overwhelmed by the sheer volume of policies available. The same can be said for individual life insurance seekers. So we have put together this short guide on the three common types of life insurance: term, whole life, and universal life.

Different types of life insurance

Term Life Insurance: Term life insurance plans provide death protection for a specified term and fixed premium. These plans are ideal for providing extra peace of mind during specific stages of life, such as marriage, birth of a new baby or purchasing a home.

Unlike other forms of life insurance, term life doesn’t have any cash value and expires at the end of the term whether you make any claims or not. However, term insurance is usually the cheapest option for many, and some policies can be converted to permanent plans should your circumstances change.

Whole Life Insurance: Whole life insurance is a permanent plan that provides death protection throughout your life and the opportunity to save money. You will benefit from consistent premiums, part of which your provider will invest on your behalf, increasing the policy’s cash value. You can then borrow against the policy’s value or cash out altogether, should you need funds to cover any additional or emergency expenses. However, these policies are usually much more expensive than term life insurance due to the higher premiums.

Universal Life Insurance: Universal life insurance plans offer a greater amount of flexibility in terms of coverage and premiums. Much like whole life insurance, part of your premiums will be invested, which can increase the policy’s cash value. However, you can choose to adjust the death benefits and premiums to meet your changing financial circumstances. Like all investment-based policies, the ability to increase the cash value is heavily influenced by interest rates, so there is no guarantee that the cash value will reach your desired amount.

If you would like more information on group or individual life insurance, contact our team today.