We can buy life insurance based on benefits and affordable policies according to your needs and investment in a policy. Insurance companies offer different kinds of life insurance.
Types of Life Insurance Policies:
Insurance companies offer a variety of policies for the investment needs and objectives of different kinds of life insurance –
- Term Life Insurance Policy
- Whole Life Insurance Policy
Term Life Insurance Policies:
The basic property of these policies is to secure the immediate needs of the nominees or beneficiaries in case of a sudden or unfortunate demise of the policyholder. The term life insurance provides insurance coverage for a specified term/time. Life insurance is more affordable as compared to permanent or whole life insurance. Later it will become higher as per the age increases. These include the payments done by the policyholder to the insurance company as premium investments/payments. The policyholder has to complete the premiums of the policy amount to get the principal and the interest outstanding that are paid before they die.
Mortgage Life Insurance and Group Life Insurance come under Term Life Insurance.
Mortgage life insurances are the type of life insurance which covers the current balance of your mortgage and pays back to your lender without paying your family when you die, the Group life insurance (also known as wholesale life insurance) is the term insurance occupying a group of people usually employees of the same company, members of a union, or association or might be the members of pension investing in the policy.
Individual proofs for group life insurance policies are normally not considered. They consider the size, turn over, and financial strength of the group.
Benefits of Term Life Insurance Policies :
- Choices in policy lengths are provided by the term insurance.
- The most affordable way to buy life insurance for an individual.
- No down payments are required to buy insurance, and premium payments are accepted.
- It can help in replacing your daily income for a certain period of time, such as raising your child or pay off your mortgage.
Whole (or) Permanent Life Insurance Policies :
The permanent life insurance is the type of insurance that continues till they receive payments and doesn’t expire. Permanent life insurance has more benefits and “cost value” is high. These types are basically not affordable for everyone to buy. It is a guaranteed policy where you can get the lifetime coverage, as it doesn’t expire, and the sudden death will not change the death benefit amount as they are guaranteed. But there will not be any changes in the policies later on, which means no surprise benefits will be given. You have to buy the Whole Life Insurance policy by giving a lump sum amount as a down payment. These include different other policies like – Universal Life Insurance Policies, Variable Life insurance Policies, and Variable universal life insurance policies.
Universal Life Insurance Policy have different kinds under it, and they are:
Guaranteed Universal Life Insurance Policies:
This type of Universal life insurance is low in cost to buy as compared to other universal life policies, whereas the “cost value” of this policy is low as well. These policies guaranteed the death benefits, and there is no change in the payments. If you forget to pay the premium for once you may lose the policies, and no benefits will be given to you. If you have a habit of delaying bill payments then this type of insurance is not recommended for you. Because, no chances will be given to you, if you forget the payment for once and you will lose the guarantee of the policy.
Indexed Universal Life Insurance Policies:
These are the Universal life policies that work in a flexible way. This means the “cost value” is flexible, and can go upside down.
In this policy, you can access your cash value, which linked to the stock market, grows according to it. This policy works on the linkup with the stock market, so the guarantee of your cost value cannot be taken. Your cash will not be able to take full advantage of the stock market gains, so you should be very careful about buying such a policy.
You should understand the participation rate, and cap on gains before buying this type of policy. But in this policy you can skip your payments, or reduce the premiums, as long as your cost value can cover your premium payments. But if your cost value doesn’t cover your premium payments, and still you are skipping your payments, then your policy may collapse. So you need to be updated with your policy cost value reports. Your death benefits in this policy may adjust to give, to your family needs change.
Variable Universal Life Insurance and Variable Life Insurance policies:
The Variable Universal life insurance and Variable life insurance links up to your policy top the investment accounts, or the investment markets, where the cost value may increase highly or can decrease gradually.
It is based on the investment market turnover. If you know how to handle the policies in the investment markets, then it is very beneficial for you. As you can take high amounts of loans under your increasing “cost value”.
You can vary your payments according to your cost value in the investment market, and can also change the “death benefits” by it.
