Types Of Life Insurance
There are only four major types of life
insurance that are really designed for consumers.
These four types of life insurance are Whole Life, Term Life,
Endowment and Universal Life.
A life insurance policy pays a death benefit, called "Face
Value", benefits to the Beneficiary upon the death of the
person insured - or when the policy matures, whichever comes
first. The latter, in the case of "Endowment" and "Whole Life"
type insurance policies. When the policy matures it will go to
the owner, assuming the owner is still living.
Other than the insurer, there are three basic parties
involved in life insurance contracts; the Policy Owner, the
person Insured and the Beneficiary or Beneficiaries in the case
of more than one person being named as such on the policy. For
example, this can happen in the case of the last surviving
parent leaving the proceeds to be divided among their
children.
The Owner controls the policy and makes all of the
decisions about Beneficiaries, borrowing the cash value,
selecting the type of settlement options and pays the premium,
ect. The Insured is the person whose life is covered and the
Beneficiary receives the proceeds from the policy when the
insured person dies from a cause covered under the policy
guidelines.
Here are a few of the most common life insurance
policies:
Click here to get a free life insurance quote.

Whole Life Insurance
Whole Life is a permanent type of life insurance in
that it covers the Insured for their entire life, up to the age
of 100 years. There are two basic types; Continuous Premium
Whole Life or "Straight Life". There are also limited payment
plans in which the premium is paid for a limited period of
time. Example, 20 years would be called "20-Pay Life". You
would pay a higher premium for the 20 year period, but would
then be finished paying for the policy.
Endowment Insurance
An Endowment covers the insured person for a "stated
period of time". It's sometimes called "Limited Period
Insurance Coverage". An Endowment is similar to Whole Life
Insurance except it matures faster.
Endowments build cash value faster because they have a
much higher premium than other Whole Life plans.
Types Of Term Life
Insurance
There are several different types of term life
insurance policies available. Term Life policies provide "pure"
insurance protection for a specified period of time. Example,
10-Year Term. Term life is considered "limited period
coverage".
A Term policy pays the "Face Value" on a contingency
basis. The insurer only pays Face Value contingent upon the
insured's death during the term of the policy, the Face Value
is not paid after the policy lapses or expires. Note: "Face
Value" is the actual amount that you're paying for the policy
to cover. Example, a $100,000 policy would have a Face Value of
$100,000.
Term Life is the lowest cost insurance and is designed
for those with limited resources available. It also provides
more Face Value coverage for a given dollar premium than any
other type of policy. Term policies can be expensive if
purchased later in life. There's also no cash value with Term
Life policies. They provide only "pure" life insurance
protection.
Insurance Riders
Different types of Life Insurance Riders explained.
Universal Life Insurance
Universal Life is a policy in which part of the
premiums are used to buy insurance protection and part are used
to invest in the cash value part of the policy. Universal Life
is NOT a Whole Life Insurance policy. The Insured's
premium is paid into an "accumulation fund", maintained by the
company. This fund earns varying amounts of interest, according
to money market type of interest rates. Universal Life also has
a "flexible" premium. Universal Life Insurance is the only
one of the types of life insurance
that requires a "Securities" license to sell.
Health Insurance
Inexpensive health insurance options are also
available.
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