subject: The Different Types Of Life Insurance [print this page] Life Insurance is a popular financial product that can be divided into two main types of basic insurance classes. These classes are temporary insurance and permanent insurance. These two classes can then in turn be divided into the insurance subclasses of universal, term, whole life and of course endowment life insurance.
Universal life coverage
Universal life insurance (also commonly called UL in the insurance industry) is a fairly new life insurance product that is intended to combine permanent insurance coverage and greater premium payment flexibility. This allows for a greater potential growth of cash values. Currently there are a number of different types of universal life coverage policies available on the market and include traditional fixed universal life insurance, guaranteed death benefit insurance, variable universal life insurance and equity indexed universal life insurance.
Term insurance
Term assurance is a type of life insurance that simply provides life coverage for a predetermined period of time. This type of life policy does not accumulate cash value and is considered to be "pure" insurance. There are three distinct factors that will need to be considered when investing in term insurance:
The face amount which is essentially the protection or death benefit
The premium that needs to be paid for the cover
The length of time of the coverage (also called the term, which is why this type of cover is called term insurance).
Please Note! This type of insurance premium only purchases protection in the event of death.
Whole life coverage
The whole life insurance coverage policy provides lifetime death benefit coverage charged at a level premium. These premiums are much higher than normal term insurance for the first few years, but drop over time and premiums paid across a lifetime are roughly equal to other policy types.
There are a number of benefits to whole life insurance that include guaranteed death benefits, guaranteed cash values as well as fixed and predictable annual premiums. Death benefits can also be increased with the use of policy dividends, although these dividends are not always guaranteed.
Endowment policy
Endowments are policies are cumulative cash value policies that equal the death benefit of the investment at a certain age. This age at which the investment conditions are reached is called the endowment age.
It must be noted that endowment policies are much more expensive than either whole life or universal life policies. This is because the premium paying period is much shorter and the endowment date of the policy is much earlier.
by: Lifebenefits
welcome to Insurances.net (https://www.insurances.net)
