Financial planning is of utmost importance to make proper use of your income. You can invest in stocks and mutual funds or can go for insurance policies. As building a corpus is essential, so is the protection component. With prevailing inflation, life insurance has become a necessity. It not only covers your life but also ensures the financial security of your family. There are several types of life insurance policies that you can choose from.
Are you thinking about which type of policy you should go for? Well, we have it sorted for you. We have listed below the three main variants of life insurance to help you understand better. Let us take a look into it.
3 Types Of Life Insurance
Whole Life Insurance
This type of insurance is also known as straight life or permanent life insurance. It was the original variant of a life insurance policy in the nineteenth century. A whole life plan is one of the safest and stable savings schemes. If the premiums are paid, it ensures to pay a death benefit. One of the interesting features of such a life insurance policy is that there is no stipulated time set for the plan’s validity, which offers the insured life cover until his end. This plan provides three necessary assurances. They are:
- Rate of return on cash
- Cost that is constant and locked at the time of purchase
- Death benefit that will last for a lifetime
It would be best to look at all its terms and conditions before going in for it. What is beneficial for others may not be of gain for you.
Universal Life Insurance
It is nothing but term insurance, which provides the facility of savings along with it. Similar to other life insurance policies, you have to pay a regular premium. It also assures payment of a death benefit on the periodic payments you make.
However, there is a catch in such insurance policies. You can pay for the premiums either in whole or part. These are a set of flexible schemes and have no fixed premium amount. All you have to spend is on the insurance cost and a few other costs to keep the death benefit active. In most of the policies, you will receive interest based on your deposited amount.
Term Life Insurance
It is one of the simplest types of life insurance policies. This insurance covers you for a stipulated period. When the policy matures, you do not have to pay any premium, and your life coverage is also over. The term life insurance commonly offers 10, 15, 20, and 30-year terms. There are other types of such a scheme, and they are:
- Level Term Insurance
- Decreasing Term Insurance
- Yearly Renewable Term Insurance
After the end of the term, most insurance providers will offer you to continue the coverage in the same way but at a higher cost.
So, you see, these were the three basic types of life insurance policies that you can choose from for your investment. Each has something unique to offer, and you have to select the one you think will suit your needs and requirements the most. We hope we have been able to help you know about the variants of life insurance policies. But we suggest you to discuss it with the best Insurance Brokers USA befor you go with any type of insurance.