Looking to get life insurance but don't know where to start. Life insurance can be a great comfort if you are worried about how you or your loved ones will fare after someone's passing. However, there are many different plans to choose from and not all of them will be best for you.
You want to pay into life insurance that will work for your situation. Review these types of life insurance to help you better understand what you might be buying.
Term Life Insurance
A term life insurance plan has a time limit, hence the name "term." You pay money toward it and if you die within that term, say 20 years, it will pay a set amount to your beneficiary. It is less expensive than permanent life insurance but also won't cover you past the term limit.
People may use this life insurance if they want to cover a mortgage or other big expenses in case of an accident, or for those who only need about 30 years or less to be covered.
Whole Life Insurance
Whole life insurance is one of the most common types, especially for permanent life insurance. It is generally a bit more complicated to set up compared to some but will cover you for your entire life. It pays the death benefit but also includes a cash investment you pay toward while having the policy.
It is much more expensive than term life insurance, so that is a consideration for some. There are additional types of whole life insurance, like limited pay, that could be useful to know. You can learn more about limited life insurance with https://paradigmlife.net/blog/limited-pay-life-insurance/.
Universal Life Insurance
Universal life insurance is similar to whole life insurance as it lasts your whole life without a time limit, but it's more flexible. You are still paying in for a death benefit and cash sum at the payout time, but you can choose the amounts more easily with this policy so it can be cheaper to pay into.
By adjusting the death benefit and premiums, the end cash payout will be changed. There are also different types of insurance policies under the universal title including indexed, guaranteed, and variable.
Group Policies
You can also talk to a life insurance agent about group life insurance policies. It is different than private life insurance and is usually purchased for employees.
The insurance industry has a lot of options and variations on policies. Being familiar with them will help you make the best choice for you and your loved ones.
All Types of Life Insurance
The various types of life insurance are all meant to protect you or your loved ones after someone's passing. Whether that protection is in the form of a lump sum, having enough money to pay off a mortgage or debts, or in the form of investments is up to you and the policy you choose.
You will likely be paying into it for many many years, so make sure you talk with your life insurance agent and explore all the options before choosing one. And if this helped you feel more knowledgeable about the types of life insurance, keep reading more useful info.