Types of Life Insurance
Whole Life
Permanent insurance is designed to last for the policyowners whole life or to age 100 by definition. Whole life insurance (straight life) provide for continuous level premium in the early years to subsidize the late years when mortality is so high. Whole life insurance is the most common type of permanent life insurance policy that people purchase.
Term Life
Term Insurance is designed to provide a temporary solution. Initially the advantage of term insurance is the low cost. It is the cheapest insurance at any age, at first. But as we get older, the chance of death increases, so either the premium goes up or the benefit goes down.
It is called Term Life because it last only for a term. After the term is completed it expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.
Whole vs Term Life
There are key differences between term and whole life insurance which impact what type of policy you need. Both term life and whole life have their benefits and drawbacks. Term life insurance is affordable and straightforward, while whole life doesn’t expire, but is more expensive. Term life insurance is right for most people but that doesn’t mean it’s right for everyone, and some people may benefit from whole life insurance.
To decide between term life vs whole life insurance to protect your family, it’s important to know how they’re different and what makes each right or wrong for your financial scenario.
Other Types of Life Insurance
You may be familiar with term and whole life insurance, but there are several other options depending on your needs and financial situation. We’ll explain everything you need to know about the following eight types of life insurance:
