A Comprehensive Guide To Different Types Of Life Insurance

When you buy an insurance policy, you buy a promise that the nominees of the insurance will get the sum at the age of maturity of the contract. This is one of the best ways to offer comfort to your family when you will not be around. This way, they will be able to get on with the living by paying the bills in time and other expenses like mortgage, child care, etc.

The concept, at its core, is very simple. But due to the plethora of cases, it is not easy to oversimplify all the cases and all the insurance policies. Since, it is important that you get life insurance, we will help you in understanding different types of them. After reading this post, you will be able to know which once suits your need.

Major Types Of Life Insurance

On a broader level, there are two types of life insurance:

• Term Life Insurance

• Permanent Life Insurance

Term Life Insurance

It is a simple type of insurance where you pay premiums for a set period of time and when the contract comes to its maturity date, you would have a handsome payday. Typically, the period goes from 10,15,20,25,30, and so years. In this insurance, you have mortgage protection because there is no compulsion of death to get the insurance money. When it is time, you will be paid at the agreed upon rate and mortgage will be paid off.

Here are some of the insurances that are covered in term life insurance.

Medically Underwritten Term Life Insurance

They are one of the most affordable policies with a number of options that are tailored for your convenience. Before underwriting the contract, your age, health condition, lifestyle, and other factors will be considered to determine a promised rate of return.

As mentioned earlier, this insurance is cheap to obtain and offer protection when you need basic health care services. In a traditional setting, you can obtain this policy for as low as $12.

There are chances that you may have to go through medical examination but this would yield exceptional returns for you at the time of maturation.

Simplified Issue Life Insurance

To obtain this policy, the applicant needs to fill a questionnaire that has both lifestyle and health related questions. This is a little expensive from the previous type of insurance but it does not require medical examination to validate the policy. This policy is also obtained in the form of final expense insurance or whole life insurance for the whole family.

This policy is idea for those who are sure not to appear before a medical board to run go through examination.

Permanent Life Insurance

As the name implies, this type of insurance covers the whole life and has no set terms that would mature the contract. This is the reason they are more expensive than term insurance, sometimes around 5 to 20 percent.

A part of this permanent life insurance is reserved for a term and the rest goes on as long as you pay the premiums for the rest of your life. It is important to have a chat with a financial advisor before you buy a policy.

There are a number of permanent life insurance policies. Some of them are as follows:

• Whole Life Insurance

• Universal Life Insurance

• Indexed Universal Life Insurance

• Variable Universal Life Insurance

• Guaranteed Issue Life Insurance

The level of premiums and conditions that are paramount to the underwriting of the policy and this will directly affect the value of your promised money at the time of maturation.