Before you apply for a life insurance policy, it is important that you are aware of the various types of life insurance that are available in the marketplace. The following are the three major types of life insurance policies that can meet your needs.
Term life insurance
Term life insurance is a life insurance policy that provides coverage – at a fixed rate – for a specified period of time. If you sign up for a term life insurance and don’t die during the specified period, you won’t get any financial benefit. But if you die within the agreed period, your insurer will your beneficiaries the death benefit of the policy. Read more
With life insurance, you get to choose the amount you want to pay and how long you want the coverage to last. Most insurance companies allow you to renew your term life insurance. However, when you renew a term life insurance policy, you may pay more, depending on your age and your health status.
Whole life insurance
Whole life insurance, also known as permanent insurance, is a life insurance policy whereby you get a life time coverage after you pay your insurer the required premium amount. Unlike the term life insurance, whole life insurance is very expensive since it is a lifetime contract. So, make sure that you ask your insurer about the amount of premium you need to pay before signing up for a whole-life insurance policy. Read more.
Universal life insurance
Universal life insurance is a blend of term life insurance and whole life insurance. For universal life insurance, you get to determine a specific amount you will pay every month for your life insurance coverage. The Insurer will deduct some of the money as payment for your life insurance while the rest will build up in cash value. The insurer will also pay you a variable interest rate for this policy. Read more.
Endowment life insurance
An endowment life policy is an insurance contract that comes with both a term life insurance policy and a saving component. Unlike permanent life insurance policies, endowment life insurance policies allow the insured to receive a lump sum amount after the maturity date or when the insured dies, whichever comes first. So even if you die before your money matures, your child or beneficiary will receive your payout. But remember, a portion of your premium will be used to provide life insurance, while the other portion will be invested in a saving account. This means that you will only get minimal interests if you opt for an endowment life insurance policy. Read more.
Mortgage life insurance
Mortgage life insurance is an insurance policy that allows you to repay your mortgage debts when you are no more. This type of insurance policy is designed to help you protect your house from foreclosure when you are gone. Unlike traditional life insurance, mortgage life insurance repays your death benefit only when the insured dies and the mortgage debt is still in existence. Read more.
Joint life insurance
Joint life insurance is a type of a life insurance policy designed for more than one person. Policyholders of joint life insurance policy are mostly couples who depend on each other’s income to meet the family needs. It is also for individuals who want lifetime coverage. Even though this type of life insurance can be in the form of term life insurance, most joint life insurance policies are either universal or whole life insurance. That is, couples can borrow money, as well as use the money, from their cash value to pay their premium. Read more.