Types of Life Insurance Policies
One of the best ways you can determine the right plan for you is to know the difference between various life insurance policies. Study the types below and you'll be well on your way to the right affordable life insurance plan for you.
Whole Life Insurance
With whole life insurance, you receive coverage for the remainder of your life. You name the beneficiary of your choice, and the payout is made to that individual when you pass away. This form of insurance has a low-risk cash value account that has tax deferred cash accumulations. The premium is fixed, so the enrollee doesn't have to worry about fluctuating rates. However, it doesn't offer you the benefits of investing in different accounts, such as stocks, money markets and bond funds.
Variable Life Insurance
Then there is variable life insurance, which is an option that offers permanent protection. It also offers a flexible account. The beneficiary receives the death benefits from the policy, and the policyholder is able to borrow from the policy throughout his or her lifetime. There is no promised cash value, and there's no flexibility for the premium or face amount on the policy.
Universal Life Insurance
Universal life insurance gives you the option to earn interest on the cash value of your policy. The policyholder is even able to borrow or withdraw from the policy for as long as he or she is paying the premiums. The face amount and premium on the policy are fairly flexible.
Universal Variable Life Insurance
For a little bit of both, there is the universal variable life insurance; this option offers flexible premiums and allows withdrawing from the policy. The beneficiary receives the death benefit, and low risk tax deferred cash value options are available. Investment options in stocks, money markets and bond funds are also available.