Though the term ‘life insurance’ is used by people from a generalist point of view, technically speaking there are four types of life insurance that are avail by people - Term Life Insurance, Whole Life Insurance, Universal Life Insurance, and Variable Life Insurance.
All these categories of insurances are unique in terms of their efficacy but which one you will choose will certain depend upon your requirements and your plans for your future.
Term Life Insurance
This is arguably the simplest type of all the insurances that are available besides being the cheapest one as well. This particular variety of insurance provides monetary benefits and protections in the event of the death even if the policy holder does not have formidable savings, or cash values for meeting the terms of the period of coverage. This type of life insurance can be availed for certain set periods life tem fifteen, twenty five or thirty years. When you have the ARTL or “Annual Renewable Term Life”, the policy will get renewed every year automatically and the premiums start increasing as you get older. However, if you do not like that and want the premiums to remain static each year irrespective of your age for the entire tenure of the policy, you can opt for Level Term Insurance.
Another type of term life insurance is Decreasing Term Insurance, in which the premium remains static though the death benefit decreases with the passage of time. This particular type of policy is ideal in case you are willing to cover a particular debt (for instance mortgage, business plan and so on) that will decrease over time.
Whole Life Insurance
This type of insurance coverage offers a permanent protection to the nominee with the help of a cash value account which grows in amount with the passage of time. This type of insurance coverage offers level benefits of death as well as level premiums all throughout the life provided that you continue to pay the premiums.
Universal Life Insurance
This particular type of policy provides much more flexibility than he whole as well as term life insurance. This type of insurance policy has a number of critical moving components that you need to understand before you oft for this type of policy. After you have made the initial payment, you have the option of reducing or increasing the amount of death benefit that you can enjoy. Again, after you have made the initial payment, you have the option paying the premiums whenever you feel convenient and the amount is not stipulated as well so that you do not feel any financial pressure on yourself.
Variable Life Insurance
This type of life insurance policy provides death benefit along with an associated side fund which functions like a separate investment account. The presence of this account eradicates various uncertainties that are generally associated with investment.