Consumers looking to save money on life insurance by getting online life insurance quotes are faced with an array of choices – it’s not as simple as saying, “Gee, I think I’d like to buy life insurance today.” If you’ve been doing research about life insurance, you’ve likely seen confusing terms such as “term life” “whole life” “universal life” and other variations of life insurance policies. Once you start reading about the various options, you may have even thought that your best bet is to not bother looking for life insurance quotes at all. Don’t give up!
We can help you understand the five basic types of life insurance so you are much better informed when you speak with an agent.
Whole Life Insurance
Whole Life Insurance is a policy that will be in place for the entire life of the person being insured. Typically people choose whole life insurance because there is no expiration date on the policy, and there is a guarantee that the beneficiary will be able to cash in the policy upon the death of the insured.
In general, consumers have two pays to pay for whole life insurance policies. You can either pay each year or (in most cases) you can make payments at th e beginning of the policy that will equal the total cost of the premium. Whole life insurance policies also offer flexibility, because you can exchange the policy for a cash equivalent before the death of the insured.
Term Life Insurance
Term Life Insurance is a popular option because it costs less than whole life insurance. Rather than offering coverage for the entire life of the insured, with term life insurance you are purchasing insurance coverage for a predetermined chunk of time. This period of time is called “the term.” If you’ve been searching for life insurance quotes online, you’ve likely come across agents offering term life policies. While you will almost always pay less for a term life insurance policy than for a whole life policy, you are not able to cash in a term life insurance policy, meaning it will have no value if you cease making premium payments..
Universal Life Insurance
Universal Life Insurance is an option for customers in the market for a Whole Life policy. Universal Life Insurance is popular because it covers the insured for their whole life and it accrues a cash value as time goes on. People choose Universal Life (which is sometimes called Flexible Premium Adjustable Life Insurance) because it provides several options for making payments on the policy. In addition, you are able to alter the death benefit while you are covered. You may decide to increase the value of the policy as you are more financially stable. Adding to the premium will make the policy more valuable and offer your beneficiary a higher value.
Variable Life Insurance
Another variant of whole life insurance is Variable Life Insurance. These products are similar since there is a cash value to the policy and the insured is covered for the duration of their life. Consumers choose variable life insurance because they have a say into the way the company invests the value of the policy. This means that if you are willing to take more risks with how the policy is invested, you could enjoy a higher return and, hence, a higher cash value in your variable life insurance policy. On the down side, your beneficiary may find that the value of the policy over time has actually decreased if the investments you have chosen lose value.
Variable Universal Life Insurance
If you are looking to control you insurance investments as much as possible, Variable Universal Life Insurance may be the best choice for you. As a rule, variable universal life is essentially a mix of Variable Life Insurance and Universal Life Insurance. Consumers have control over how the company invests the value of the insurance policy, as well as having control over the amount fo the premium and benefit upon his demise. Of course, this results in a higher risk profile an d insurance premium. But if you want to have as much control as possible, Variable Universal Life may be for you.
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