Six basic types of life insurance
Imagine how the policy title or sales presentation might appear, all life insurance policies to one or more of three basic types shown below are the benefits derived. Some policies due combine more than one way of life insurance can be confusing.
Term life insurance
Endowment Life Insurance
Whole Life Insurance
Variable Life Insurance
Universal Life Insurance
Variable universal life insurance
Term life insurance
Term life insurance for a period of one year or more death protection. Some companies are offering policies with terms up to thirty years. Premiums on term insurance remain level during the life of the policy. Term life insurance has no cash value account. Death benefit only if you die within that period of the year will be paid. Term insurance generally the largest immediate death protection for your premium dollar offers.
Some term life insurance policies to one or more additional terms even if your health has changed are renewable. Each time you renew the policy for a new term, premiums will be higher. You big old premium and the length of time should check the policy can be issued.
Some term insurance policies also variable. This means that the conversion before the end of the period, a whole life insurance policy or endowment policy trading terms even if you are not in good health. New policy to be more than the premium you pay for term insurance would have been.
Life Insurance "Endowment"
An endowment insurance policy pays you a sum or income, policyholder, if you live to a certain age. If you died before then, the death benefit to be paid to your beneficiary. Endowment insurance premiums and cash values of whole life insurance is too high for the same amount. Thus endowment insurance for your premium dollar makes the least amount of death protection.
Whole Life Insurance
As long as you live the life insurance provides death protection. The most common type straight life or ordinary life insurance for which you pay premiums for as long as you stay the same is called. Many times more than the premium you initially pay for the same amount of term insurance will be. But they eventually premiums you until years later if you were to keep renewing a term insurance policy will pay are smaller than.
Some whole life policies you for a short period such as 20 years, or pay premiums until age 65. Premiums for these policies is high for ordinary life insurance since the premium payments are squeezed into a shorter period.
Although you pay higher premiums than for term insurance with whole life insurance to begin, the life insurance policy cash values which may stop you if you pay the premium growth. You usually can take either cash or use it to buy some continuing insurance protection. Technically speaking, these values are called nonforfeiture benefits. It benefits you to lose or forfeit not you stop paying premiums refers to. Amount of these benefits as policy, so you depending on its size and how long you have owned it.
A policy with cash value as collateral for a loan can be used. If you borrow from life insurance company, the interest rate shown in your policy. Any money you owe on a policy loan benefits if you were to die, or cash value if you were to stop paying the premium will be deducted from.
Variable Life Insurance
Variable life insurance, your beneficiary upon your death and the death benefit to you is permanent protection. Death benefits or policy of the investment part of the price fluctuations based on performance may be down. The variable life insurance policies guarantee that the death benefit will not fall below a specified minimum, however, is guaranteed a minimum cash value will hardly ever. Variable whole life insurance is a form of investment risk because it is considered a security agreement under the federal securities laws are regulated as securities must be sold with a list.
Universal Life Insurance
Universal life insurance is a variation of whole life. Part of the investment policy of insurance policy is different from the part. Investment portion is invested in bonds and mortgages, universal life, part of the investment is invested in money market funds. Part of the policy cash value is set as an accumulation fund. Investment income is credited to the accumulation fund. Save part of the death benefit is paid for out of funds. Unlike whole life insurance, universal life insurance cash value grows at a variable rate. Generally, there is a guaranteed minimum interest rate policy is implemented. No matter how bad investment go by the insurance company, you cash back on a certain minimum return guarantees. If the insurance company does well with its investments, the cash portion will increase the interest return.
Variable Universal Life
Variable universal life insurance pays your beneficiary a death benefit. Amount of benefit depends on the success of your investment. If the investment fails, there is a guaranteed minimum death benefits paid to your beneficiary upon your death. Variable universal insurance way you would any other part of your policy's cash value account and gives more control. Whole life insurance is a form, it has elements of both life insurance and a securities contract. Because the policy owner assumes investment risks, variable universal products under federal securities laws are regulated as securities must be sold with a list.
Rates and coverage forms vary from state to state. Shop around on your own and talk to an independent insurance agent to make sure you find a plan that's right for you sure. It's amazing how much rates vary from company to company for the same coverage can be.
Seeing Science Everywhere
11 years ago
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