For people that are just starting with life insurance and the life insurance policies, it can be quite confusing to choose the right ones, off the bat. Most people across the world, place immense trust in their life insurance agents with the hope of having their best interest at heart. Fortunately enough, most of these agents guide their customers in the right direction. However, there are a lot of them in the market, with malicious intentions too.
Hence it is imperative to keep yourself safe and to keep such malicious agents at arm’s length. In order to so, it is essential to understand the different policies in brief. We’re going to help you do so, in this article.
There are mainly four types of life insurance policies, but these four categories are again subdivided into different genres. However, we will discuss the primary ones that matter the most. Although some people claim that the best policy is life insurance over 85, arguments can again be made depending on the priorities of the client, and the situation also calls for understanding the primary goals of the client or the customer.
Term life insurance
- It is the least experience form of insurance policy that demands the customers to pay every year.
- If you outline the overall expense, it does not cover the death benefit.
- It has no cash value, and it has a minimal turnover a return on investment.
- It typically lasts for the term – 10, 1 or 30 years, but without any increments.
Whole life insurance
- It is for the entire lifetime of the insured person
- The insurance of this person is a premium structure for a lifetime and can generate a cash value over the years.
- The insured person is also entitled to receive dividends from the life insurance company.
- Since the cash value will grow after years, the insured person gets a benefit from the type of life insurance.
Universal life insurance
- It is permanent life insurance, but when compared to the former, it has a flexible structure of premium.
- It comprises of a cash-value account the insurance charges are generally pulled from this account, every month.
- It provides a guaranteed minimum of 2% growth
- The cost of universal life insurance rises overtime and also benefits the owner when the prices are the lowest.
Variable life insurance
- It is similar to the universal life insurance plans, but the cost of insurances also varies over time.
- It does not comprise a cash value account that produces a fixed rate of return.
- They are invested with the sub-account with the policy.