When you are searching for the right insurance policy that will provide for your beneficiaries in the event of your death, there are two principal types that you should consider. These are referred to as term insurance and permanent insurance. Each type comes with its own benefits that you will likely want to be aware of so that your decision can be a more informed one.
Term Insurance
This is a simplified type of insurance that will only pay out in the event that your death occurs within the given term of the policy, which is usually anywhere from 10-30 years. Underneath this primary form of insurance are two additional versions of term insurance that are available for you to select.
A level term insurance policy is one where the benefits derived from the policy will remain the same throughout whether your death occurs in the first or last year of the policy. A decreasing term policy is one where the benefits will decrease over time as you approach the end of the policy. The reductions in the amount of benefits you receive will typically occur every year. The vast majority of term insurance policies are level policies.
Whole Life or Permanent Insurance
A whole life policy is one where the benefits derived from the policy will still be paid even if you die 60 years after you've purchased the policy. Within the whole life or permanent insurance policy type, there are three variations that you may want to consider, which include universal life, standard whole life and variable universal life. If you select a traditional whole life policy, the benefits you receive and the premium you pay each month will remain the same during the course of the policy.
A universal life policy is one where you have the ability to increase or decrease the amount of benefits your family receives upon your death at any time during the policy. Any extra premium payments that extend past the initial cost of the insurance will be placed within the cash value of your policy. A variable insurance policy is one where the cash value of the policy can be controlled by you and spread throughout various accounts of your choosing like mutual funds.
After you have determined which policy works best for your needs, call us today to start building your policy.