There are two main types of popular life insurance, both of which offer a range of invaluable benefits to consumers. Below we’ll discuss the benefits, as well as a few cons to each policy type, to help you decided which one is right for your own individual situation.
Term Life Policies
Term life insurance is the most popular type of life insurance policy with consumers today. It is the cheapest kind of insurance for the maximum amount of coverage and benefits. With term insurance, you and your family can enjoy peace of mind at an affordable price.
If you die during the term of this insurance policy, your family will receive a lump sum payment. This lump sum can help to cover a number of costs as well as provide some degree of financial security at what will inevitably be a difficult time.
The money could assist with costs day to day living expenses, mortgage payments, funeral costs and even education for the children. It gives people peace of mind knowing that even if anything happens to them their family will still be taken care of.
The reason why a term insurance policy is so called is because the policy is taken out over a fixed term. This means that you can enjoy easy budgeting and low cost payments as well as knowing exactly how long you will be making payment for.
The premiums remain level throughout the term of the policy, so you will never have to worry about the cost of your premiums increasing. Term life insurance is so much cheaper than other life insurance is because a payout is only made if the insured party passes away during the term of the policy. This is the only way for the named beneficiary to be eligible for a payout.
On the downside, once the policy expires you will not be able to reclaim any money and the policy will be canceled. At this point you would then need to simply renew the term policy that you had or look at taking out another life insurance policy all together.
Whole Life Insurance
Unlike term life insurance, whole life coverage offers a guaranteed payout, which to many people makes it better value for money in the long run. Although the premiums on this type of cover are more expensive than level term insurance, there will be a payout whenever the insured party passes away.
(The higher monthly payments will guarantee a payout at some point.)
The simplest type of whole life insurance enables you to enjoy the convenience of level payments through the term of the policy until you die. Upon death, your family receives a payout and the policy becomes null and void.
As with other insurance policies, you can tailor-make your whole life insurance to fits your needs and your budget. For instance, you could choose additional coverage such as critical illness insurance.
Another type of whole life insurance includes an investment, where your monthly payments are split between your premiums and the investment side of your policy. You will enjoy a guaranteed assured sum that may allow you to enjoy retirement.
Both term insurance policies and whole life policies offer valuable peace of mind to policyholders. The cost of this type of insurance a small price to pay for the peace of mind that comes with being protected.
Life insurance is becoming more and more popular. This is because people are now realizing the importance and the benefits of a good life insurance policy. It protects their family and loved ones from any debt that may have to be paid and it may also leave them enough to live on and be comfortable.