Different Types of Life Insurance
Life insurance has been around for hundreds of years. It has evolved over time, but its purpose has remained the same. Life insurance is designed to protect your family after you pass.
There are several different kinds of life insurance to choose from. You can purchase term, whole, or universal life insurance. Each type of insurance has its own unique features.
- Term Life Insurance
Some people purchase term life insurance coverage because it is the most affordable option on the market. However, there are drawbacks to purchasing term life insurance. For example, term life insurance does not build cash value.
Term life insurance is also not very flexible. If you need to make changes to your policy, you can do so with most whole life insurance policies, but you cannot make changes to your term life insurance policy.
- Whole Life Insurance
Whole life insurance is a little more expensive than term life insurance, but there are many advantages to purchasing whole life insurance coverage. For example, whole life insurance builds cash value. This means that you can invest your money, and it will grow at a rate of interest.
Whole life insurance also features long-term protection. This means that your insurance will cover you for your entire life. If you purchase term life insurance coverage, it will only last for a finite period of time.
- Universal Life Insurance
Universal life insurance is very similar to whole life insurance, but there are some key differences. For example, some universal life insurance policies feature flexible premium payments. This means that you can make lump sum payments or you can make smaller payments over time.
Universal life insurance policies also feature the same long-term protection that whole life insurance policies offer. However, some universal life insurance policies can build cash value at a higher rate than whole life insurance policies.