There is no doubt that you are aware that you need insurance for your life. This is why you are reading this today. Before you buy insurance policy it is important that you understand the options that are available to you. The below are the most common type of insurances available today.
Term Insurance
Term insurance is the least expensive type among all the life insurance coverage. These policies do not accrue any cash value which means that they are fixed over a period of time. This period of time can be one to 0 years after which they can be renewed. The policy pays the beneficiary which is usually called as nominee of your policy a certain fixed amount when you die. The amount would be fixed and would be as per the policy document. In order to avail this, you would be required to pay the premiums every year. The premiums will be less when your age is less and keeps increasing as you grow old.
Universal Life Insurance
Universal insurance are flexible kind of plans. The policies will accrue the interest and also allow the owner to adjust death benefits and also premiums to the current life situations. The policy offers a lot of flexibility as you can also skip the premium. In case you skip, the amount will be deducted from the benefit. Also, the rates will be subject to change, but they are definitely assured not to fall below certain minimum rate which will be guaranteed during your sign up stage for this type of policy.
Whole Life Insurance
This insurance is very similar to term insurance but this provides cash value too. Over a period of time, the whole life insurance builds up as a cash value on a tax-deferred basis.The insurance type is popular due to the cash value which will be accessible to either you or your beneficiaries even before you die. This is usually used as supplement to retirement funds.
Variable Life Insurance
This insurance is specially designed for the people who want to tie the performance of the insurance policy to the performance of the financial market. In these types of policies, the policy holder gets a choice to decide how the money should be invested. The cash value will depend on the way you choose. This has advantage and also comes with a risk. If you invest with a high risk profile then you might be suffer loss if the market is negative and if the market is better, your money will increase.
