Life insurance is an important part of your financial planning process. Â It’s a safety net for your family, ensuring they have financial stability during the toughest of times. However, with various of life insurance policy types available, choosing the right one can be overwhelming. Education on the main types of life insurance policies can help you make an informed decision.
Term Life Insurance
Term life insurance provides coverage for a specific period, usually 10, 20, or 30 years. If the insured person dies within this term, the beneficiaries receive a death benefit. However, if the term expires and the insured person is still alive, the coverage ends, and no benefits are paid.
Whole Life Insurance
Whole life insurance provides lifelong coverage. The policy includes a cash value that increases over time. Policyholders can borrow against this cash value or surrender the policy for its cash value, although doing so will reduce the death benefit.
Universal Life Insurance
Universal life insurance is a type of permanent life insurance that offers flexibility in premiums, death benefits, and a cash value component. It earns interest based on current market rates or a minimum interest rate, whichever is higher.
When exploring life insurance policy types consider working with an agent who can assist you in finding a policy that will fit your needs. Understanding the differences between these policy types can help you make a decision that provides financial security and peace of mind for you and your loved ones. By evaluating your options, you can ensure that you’re making a choice that aligns with your financial goals for the future.
