What Is Your Life Insurance Type?
Life insurance is a very important milestone for any individual who wishes nothing more that stable security for them and their loved ones. We are never truly aware when we actually will experience that life altering moment. It can happen anytime and it can be of great value knowing that you have something to rely on during these moments. There are different ways of ensuring your family’s security, some buy equipment that will monitor their households and make sure that everyone is safe, some take extra supplements or medication to strengthen and prolong their life spans as claimed by those supplements, everyone is trying to do their part in making sure that they live a full, well spent life with their loved ones, and getting yourself insured is a major step going in that direction.
Life insurance comes in many forms and knowing what these are will enlighten people to make the right decision faster. When people see the necessity and value it brings to families during their lowest times, they will see the good it has to offer but identifying it by knowing what we need and the types of life insurance available, will be an easier and better thought decision. The different types of life insurance come in two basic classes, temporary and permanent. Furthermore it is subdivided into subclasses: term, universal, whole life and endowment life insurance.
Term insurance provides the life insurance coverage for specific number of years in exchange for a specific premium. This type of policy does not have a cash value and a term is basically considered “pure” insurance because the premium pays for the protection in the event of death and nothing else. Permanent life insurance on the other hand is a type of life insurance that will only exist or continue to serve its purpose until the policy matures or the insured pays it out, if the owner fails to pay the premium when due the policy may expire or lapse.
There are four basic types of permanent insurance which are whole life, universal life, limited pay and endowment. Whole life insurance is good for a level premium and a cash value table included in the policy guaranteed by the company. There are primary advantages of whole life insurance. These are guaranteed death benefits, guaranteed cash values, fixed and known annual premiums, and mortality and expense charges while the disadvantages of whole life are premium rigidity and the internal rate of return in the policy may not be as high as with other investment alternatives. Universal life insurance is an addition to the insurance products available; it is used to provide permanent insurance coverage with a higher flexibility in payment of the premium and the potential for a higher return rate. Another type of permanent insurance is Limited-pay life insurance, where in all premiums are paid in specified period of time after which no additional premiums are due to keep the policy existing. And lastly, endowments are policies in which the cash value within the policy and equals the death benefit at a certain age.
Knowing your need and finding out about the right type of insurance will be beneficial to your life insurance shopping and these information will be hopefully of good use.