The common types of life insurance.
- Whole Life Insurance: This insurance is a type of insurance wherein the term is your entire lifetime. Contrary to term insurance, whole life insurance is cash value insurance and premiums remain consistent throughout the policy term. In this insurance, the insurance carrier can invest a portion of your premiums and might even share the proceeds from the investment with you in the form of a dividend.
- Universal Life Insurance: Universal life is an advanced form of whole life insurance. Similar to whole life insurance, it is cash value insurance and you do not get to choose how your premium money is being invested by the insurance company. Unlike whole life insurance, universal life insurance offers you flexibility in terms of the premium amount. You are free to decide the amount and time of the premium within the broad premium guidelines. Based on financial circumstances, you can also directly change the benefit of your policy, again within the policy norms. The changes to the premium amount, however, have a direct impact on the growth of the cash value and maybe the death benefit.
- Variable (Life & Annuities): Variable life insurance is just like another type of permanent life insurance policy. The only difference is this type of insurance gives you the flexibility to choose the way your insurance company invests your cash value. Under this policy, you can decide on having your money invested in a wide range of investment products, including stock funds, fixed interest sub-accounts, and highly-volatile international growth sub-accounts.
Life insurance helps provide long-term financial security when your family will need it most. Contact Marshall & Sterling today to estimate your coverage needs and find out just how affordable a life insurance policy can be.
A life insurance policy can help provide for your loved ones after you are gone. With many life insurance policy choices to choose from, we can help you select the right life insurance coverage to meet your budget.
Term Versus Permanent Life Insurance
Term life insurance is temporary; providing a death benefit for a specific term, such as 10, 20, or 30 years. Unlike other types of life insurance, it does not accumulate a cash value. If the policyholder dies during that term, his or her beneficiaries receive the benefit from the policy. When the contract ends, so does the coverage.
Permanent life insurance remains in place as long as the policyholder makes payments. In addition, permanent policies are designed to build up “cash value,” a cash reserve that accumulates with the policy. Typically, this cash reserve pays a modest rate of return.
Many people find that they have a combination of short- and long-term needs. In such circumstances, it may be prudent to have both types: a basic level of permanent life insurance supplemented by a term policy.
Contact us if you need help determining what type of life insurance is appropriate for you.