Understanding the Principal Types of Life Insurance


It is an undeniable fact that life insurance has several purposes. Among them is the most important one which is to ensure that a person’s family continues to live well without financial difficulties at the death of the insured. In fact, this is the most popular benefit and purpose of life insurance. Besides, there exists a less popular form of life insurance meant for businesses. It is used to protect all the employees as well as the business itself. In this regard, one should visit an insurance provider for further clarification on life insurance matters. What is life insurance? Click to know more.

Life insurance is branched into two major categories. The first one is referred to as whole life policy. It is also termed as permanent life insurance and it encompasses different subcategories which include universal life, traditional whole life, variable universal life, and variable life. Insurance companies offer different life insurance products, and clients must know that ones offered for groups are different from ones sold to individuals. Term insurance is considered to be the simplest form of insurance. This is for the simple fact that it pays only if the insured passes away when the policy is still active.

On the other hand, permanent insurance pays the settlement to your beneficiaries after death. This is irrespective of the time that you will be alive. Most insurance providers provide three different types of permanent life insurance policies. The first one is referred to as traditional whole life whereby the death benefit and premiums remain at a fixed level for the entire life of the policy. Other types of permanent life insurance policies include; universal life and variable universal type. However, not all insurers have all the variant forms of life insurances; therefore, consultation is important.

If you are a business person who loves risks, you can get more from your life insurance coverage if you opt for variable life policy under the permanent policy. In this case, the policy combines your death protection with a savings account. The key benefit of this is that the money in your savings account can be invested in stocks and bonds or any other desired money market mutual funds scheme. The chances of having your policy grow at a fast rate are high, but you have more risk. Your returns are dependent on how your investments perform. However, there are incredible policies whereby you are guaranteed that your death benefit will not fall below a given level.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s