Presently, the insurance industry pushes to create more personalized insurance coverage for life insurance policyholders. The truckload of life insurance policies offers insurance seekers an excellent list to select from. But, too often, these numerous options leave prospective policyholders confused about which to choose.
That said, if, for whatever reason, you regret your current policy, selling life insurance policy for cash is a pleasant way out. Then, if you decide to go for another policy, there are dozens of them, and this article discusses the three most common types.
What Are the Different Types of Life Insurance Policies?
You may consider these life insurance policies:
Term Life Insurance
Of all life insurance policies, term insurance is most common. Thanks to its affordability and simplicity.
Term life insurance allows policyholders to purchase a cover for a specific years-span — usually between one and 30 years. If a policyholder dies within the defined duration, the insurance company compensates beneficiaries.
This insurance plan allows people to get covered when most needed.
Term life insurance has two types:
· Level Term Life Insurance
With this plan, your premium and benefits are static over the specified period.
· No-level term life insurance
No-level payment changes as the years count. There’s either a premium increase or a benefit decrease.
Since the insurance coverage decreases over time, the package should cost less.
Sadly, the differences are insignificant, if any. Hence, many prefer the level term option.
Whole Life Insurance Coverage
Whole life insurance falls under permanent life insurance policies. As long as policyholders do not default on payments, whole life insurance — as the name suggests — offers a whole-life cover. The premium is usually fixed throughout the policy’s lifespan.
This insurance plan is best-fit for persons who wish to commit to a static budget over the policy’s validity span.
That is, at 70 years, the holder will still make the same premium amount paid when he started at 25 — regardless of factors such as health condition.
Interestingly, whole life insurance policy adds interest to your cash value, which grows continuously over the years.
Beneficiaries get paid whenever the holder dies.
Universal Life Insurance
Universal life insurance is also a permanent life insurance policy. However, whole life and universal life insurance have two primary differences; namely:
Unlike whole life, with universal life, you can decide the amount of your payment that goes for the death benefit and what portion enters your cash-value account.
While whole life insurance beneficiaries receive benefits even if policyholder reaches 170, universal policies expire.
95, 100, and 121 years are standard maturity dates for universal life insurance policies among insurance companies.
At expiration, a policyholder gets paid, and that ends the insurance contract. However, you may, at any point, decide to sell your life insurance and cash out.
Primary among other factors to consider when selecting a life insurance policy are flexibility and convenience. What works for your boss at work may be financially inconvenient for you. Ask Google for the best insurance companies and compare offers.
Noteworthily, health, age, and insurance types determine the availability of life insurance policies and payable premiums.
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