What Types of Life Insurance Are Available?
Having life insurance can provide peace of mind that your family will be taken care of in the event of your death. However, it is important to understand the different types of policies available and their features before making a decision. It is also a good idea to speak with a trusted insurance agent or professional to get the best advice on your situation.
There are two major types of life insurance. The first is term life. This type of policy pays a benefit upon the insured’s death, usually a fixed amount. A second type is permanent life, or whole life. The premium is typically higher on this type of insurance. This is because it covers a person’s entire lifetime.
The main reason that life insurance is important is because it can ensure that your loved ones will be financially secure when you are gone. It can help pay for college, mortgage, or other bills. Depending on your family’s needs, it may be necessary to increase the amount of coverage.
Term life insurance is an important financial planning tool that can be purchased through your workplace or through a trusted agent. This type of policy is designed to be affordable for most people. Term life can last from one to thirty years. Once the term is up, you have the option of renewing the policy. In some cases, your employer will contribute to your premiums. In other cases, you will be required to make additional payments to keep your coverage in force.
If your company is offering a group policy, the materials will be evaluated as if you were evaluating an individual policy. The benefits are often the same, but the type of insurance offered to groups can vary. You may need to undergo a medical exam or take a test to prove your insurability.
This type of insurance offers more flexibility than a whole life policy. A variable universal life policy typically has investment subaccounts. The amount of interest accrued under this type of policy depends on the market value of the separate account assets. This type of policy may also allow you to change the amount of your death benefit.
In addition to the traditional insurance products, some companies offer “instant approval” or a “free look” period, which allows you to check out the policy without having to pay a premium. The free look period is typically between ten and thirty days. If you decide that you do not want to keep the policy, you can cancel it and get a refund.
Another type of policy is the indexed universal life insurance policy. This type of policy is tied to the S&P 500. It is similar to the traditional universal life policy, but the cash value of the policy is tied to the S&P 500. The premiums are based on the S&P 500 and the policy will continue to build cash value as long as the S&P 500 stays above the policy’s underlying value.