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3 Life Insurance Types

When most people start looking for life insurance they don’t realize just how many options they have. Most feel so overwhelmed by all the options that they put off. Many of them never get back around to it. To help make your quest for life insurance a little easier I am going to discuss three of the main life insurance types.

Term Life Insurance – Term life insurance is probably the easiest form of insurance to understand. As the name suggests, term life insurance provides you with coverage for a certain term or amount of time. By choosing to keep coverage for a certain period of time your payments will remain the same for the entirety of your term. Once your term is up your policy will simply expire.

You can either renew your term or seek coverage somewhere else. Since it is only for a limited term plans are very affordable. Another kind of term life insurance is return of premium life insurance. The great thing about this type of insurance is that it actually pays you back. If you are still living when your term is up, you will get a refund for all of your payments. The one drawback is that this type of insurance is very expensive.

Whole Life Insurance – Whole life, unlike term life, covers your whole life. Not just a set period of time. And because it covers your entire life, it is more expensive than a term life insurance policy. The benefit is that it is guaranteed to pay out, you will earn interest at a fixed rate and your premiums will not go up as you age. If you are not a risk taker, this is the type of insurance you want.

Universal Life Insurance – This is the last life insurance type we will discuss in this article. With universal life insurance you have a great deal of freedom. You can actually customize your payment plan if you wanted to. You have both power and freedom. But understand with that power comes a great deal of responsibility. You have to make sure your plan is customized to fit your needs.

Work closely with your life insurance adviser to make sure you have all of your bases covered. Your insurance agent will suggest a payment plan for you to follow. But ultimately its up to you to follow that payment plan. You have the freedom to choose how much coverage you want, how much you pay into the account and how you make your payments.

Because you have such freedom this type of policy will cost more than a term life insurance policy. However, it is still less expensive than whole life insurance. The one thing that’s interesting about universal life insurance is the cash value aspect that comes along with it. Your policy will create cash value that generates interest over time. As you pay your payments your cash value will go up.

This is money that you can either withdraw or borrow against. Its yours to do with as you please. That’s a great option to have.

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