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Life Insurance – The different types of Life Insurance

types of life insuranceLife insurance comes in two main types, namely permanent and term insurance which are then broken down into different areas to offer a suite of Life Insurance products to suit the different stages of life and needs of the client.  It is up to you to find out about the different Life products available and to choose the right life insurance to cover your debt and secure your family’s future.

Permanent life insurance is a policy which remains active and it matures over time accruing a cash value which can be withdrawn or surrendered by the insured.  This policy cannot be cancelled.

Whole life, universal life, limited pay and endowment are 4 types of permanent life insurance.  Whole life insurance provides the insured with a life time death cover benefit at a level premium.  A cash value reserve is available to the insured which can be accessed and withdrawn as policy loans.

Universal life insurance is a merged permanent insurance with flexible premiums and an increase in cash value.

Limited pay life insurance policy is paid over a period of 10 year, 20 year and is redeemed at the age of 65.  Within this type of policy the premiums are paid over the above mentioned period.

Endowment life insurance policy refers to the cash value of the policy being equivalent to the death benefit at a specific age.  This is referred to as the endowment age. The endowment policy is claimed after a certain period of time or age, irrelevant of whether or not the insured is dead.

Term insurance is life cover for a certain time period.  Term insurance does not accumulate a cash value; it is designed purely to protect the insured against death.  There are three types of term insurance namely level, annual renewable and mortgage insurance.

Level term provides a fixed premium for over a year. The premiums remain level therefore asset management, long term planning and long term budgeting are ideal for this type of insurance.

Annual renewable term refers to a one year policy which is guaranteed to be renewed by the insurance company at the same or lesser amount and the premiums will be set according to the applicant’s age at the time of renewal.

Mortgage life insurance refers to the mortgage of the policyholder to match the protection or death benefit.  In the event of the insured’s death the mortgage will be settled.

Life insurance does cover you and your family.  It is up to you to choose the right life insurance for your family.  Professional companies can provide you with quotes which you can compare to other insurance companies.  Cheap life insurance is also available to suit your financial position.  It is never too late to look after the well-being of your family.

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