Life Insurance Policies

Life Insurance

Life insurance policies provide cash relief and financial support for the loved ones that you leave behind. Learn more about the benefits of life insurance here.

Types of Life Insurance Policies

Life insurance policies can protect your family from financial hardships in the event of your death. The proceeds received from life insurance can help your beneficiaries pay for funeral costs, medical bills, and other debts that you may have left behind. This money also ensures that the household, mortgage costs, and other bills can be maintained in your absence.

If you are interested in acquiring life insurance coverage, there are two basic types of life insurance policies to choose from:

Whole Life Insurance

Whole Life Insurance gives you coverage for as long as you live providing you make your premium payments. The best part about this type of life insurance is the fact that you can accrue additional money based on investments the you make. Investments may be in bonds, money market instruments, or stocks. After the policy has built cash value, you can borrow against it if you need to. However, you should keep in mind that borrowing against the policy lessens the amount of money paid out to your beneficiaries in the event of your death.The amount that you pay in premiums for whole life insurance coverage depends on your age and health at the time that you purchase the policy. In general, whole life insurance premiums do not fluctuate and may be quite reasonable if you purchase the policy when you are young.

The type of whole life insurance coverage that you choose also affects policy rates. Common types of whole life coverage include:

  • Traditional Whole Life which provides a guaranteed rate of return on cash value.
  • Single Premium which allows you to purchase a policy upfront with no monthly premiums.
  • Variable policies give you a variable rate of return on the cash portion of your policy.

Term Life Insurance

Term Life Insurance is exactly what the name implies: life insurance for a specific term or amount of time. With term life insurance, you can purchase insurance coverage for a specific term or number of years. Common terms include:

  • One year
  • Five years
  • Ten years
  • Fifteen years
  • Twenty years
  • Thirty years
  • Termed to a specific age (Usually 65)

The premium for term life insurance policies is based on your age and health at the time of purchase, as well as the length of the term. Because term coverage is often much cheaper than whole life insurance, it is the preferred type of life insurance for most people. However, there is no investment potential. You cannot increase the cash value of your term life insurance policy by making investments, nor can you borrow against it.

Shopping for Life Insurance Policies

When purchasing a life insurance policy, it is very important to shop around prior to making any decisions. The cost of a policy can vary significantly depending upon the policy terms and where it was purchased.

If you are looking for low cost life insurance, you may want to check with your employer to see what type of life insurance benefits you are eligible for. You can also speak to some of the associations and organizations that you belong to. Many of these groups offer low cost life insurance plans to their members.

You can contact various insurance agents and groups to see what your options are. If you decide to go this route, make sure you get at least three quotes, so you can make comparisons properly.

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Life Insurance Policies