Types of Life Insurance Policies

Types of Life Insurance Policies

Types of Life Insurance Policies

There are various types of life insurance policies that are offered by companies so you should try to find a policy that suitable with your current condition. That is why; you need to learn more information about each of them so you will know about their difference and benefits that you can get from each policy. But actually the life insurance types that you can get is divided into two major types which we will discussed more detailed here.

Term Life Insurance Policies

This insurance type is actually a simple form of insurance policy. The pays will be given when there is death that occurs within the policy term. The policy term duration can be different from each quote that you get but usually it will be from one year up to 30 years long duration. This life insurance type is also divided again into two basic variations such as:

  • Level term life insurance policy

This type of policy will have the same benefit throughout the entire policy duration that you take.

  • Decreasing term life insurance policy

On this type of policy, the benefit will be decreased in around a year of increments throughout the entire policy duration that you take.

Usually the type of term life insurance policy that people take is under the level term life insurance policy type.

Whole Life Insurance Policies

On this life insurance policies type, the pays out benefit will be given in whenever the time of the death comes. Thus if you life until 100 years old, then you will still get the benefit later on. Again this life insurance type is also divided again into three main types such as universal whole life insurance policies, traditional whole life insurance policies, as well as variable universal whole life insurance policies. Then within those three main types, you will still find different variations.

For example on the traditional whole life insurance policies the premium as well as the benefit that you will receive will stay the same throughout the entire policy. But actually the cost that the company has to spend to give 1000 dollars benefit will increase along with the person age. This means the company will need to spend very big cost if the person can live up to 80 years old or even beyond that age.

Of course, the company is actually able to increase the premium to cover the cost increase. However, it would be very hard for the person to afford the premium especially in later age. This is why the company gives the same premium throughout the entire policy. However the amount of premium that needs to be paid might be considered higher especially in the early year. But that is only done to cover the cost which will come in later year.

That is why later there are different variations of traditional whole life insurance policies that available. As those life insurance policies have different benefit and premium requirement, then you need to be very detailed when asking about the quotes that you received from the company.

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