Explaining the 4 Common Types of Life Insurance

For anyone obtaining insurance for the first time, it can be quite challenging with all the terms that can become confusing. While most people place a lot of their trust in their insurance agent, you should still educate yourself thoroughly about what you are about to enter.
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To help you understand better, here are some of the fundamental types of life insurance:

Term Life Insurance
This type of life insurance is the least expensive if you are considering getting an insurance policy that you will pay each year. If you outlive the length of the term policy, you will not be given any death benefit. On the other hand, if the insured person dies within the coverage of the term, their beneficiaries will receive a full death benefit. This policy does not hold any cash value and is not advised to become an investment since the company banks on the fact that the policy owner will outlive the coverage.

Whole Life Insurance
This insurance is meant to be permanent and will last during a person’s entire life. It has a level premium structure and will be a good investment since it builds cash value over time. An insured person can never outlive this, making their beneficiaries protected for a long time. It is also used for estate planning and to fund generational trusts.

Universal Life Insurance
This insurance is permanent. It is similar to whole life insurance, but this kind has a more flexible premium structure. Universal life insurance is not something that you can sell as an investment. Instead, it can be surrendered for its cash value. Loans and withdrawals can be taken from this as well. Corresponding surrender charges may be applied for any kind of withdrawal.

Variable Universal Life Insurance
This is similar to universal life insurance because it also has flexible premium payments and the cost of insurance rise over time. Their most significant difference is that this insurance has a cash value account which does not pay a guaranteed rate of return. Moreover, this insurance does not allow loans or withdrawals.

No matter what type of insurance you are going to pick, keep in mind that you must have a basic understanding of the rules and terms that each one presents. Different types of policies exist depending on their appropriateness with the person or situation.

At Roper Insurance Services, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (828) 697-6709. Get your free quote today by CLICKING HERE.