Term to Universal: A Guide to Different Types of Life Insurance

Life Insurance

Exploring your options for life insurance is a wise step if you want to provide for your family after passing away. Still, many people need to realize the different types of life insurance available to them. Life insurance policies differ based on your needs and your budget.

The wrong policy could leave your family and loved ones in a difficult spot, as more than half of adults in the US lack life insurance. The best types of life insurance policies protect your family when disaster strikes. Knowing what to look for will aid you in finding the coverage you need.

The good news is that you’ve found the perfect guide to learning about the right coverage policies for your loved ones. Keep reading to find the insurance provider and policy for your family today!

Term Life Insurance

Term life insurance is the most common option for life insurance coverage in the United States. It’s a simple policy that looks out for your family if you pass away in an untimely fashion. It’s also one of the most affordable options you can go with if you lack a life insurance policy.

The primary purpose of term life insurance is to replace your lost income should you pass away. Your policy protects your family so you can continue providing income for them to live on.

You choose the number of years you want coverage for when shopping for your life insurance policy. The length of the terms ranges from one year to thirty years, so you can shop to find the best fit for your life. Most policies are built to cover the prime working years for the person covered by the policy.

Coverage amounts also range as high as millions of dollars. The main benefit of a term life insurance policy is the coverage you get at a low price. The drawback is that your family receives nothing if you pass away after the policy expires.

Whole Life Insurance

Whole life insurance is another viable option if you require a life insurance policy for your family. It’s a wonderful option for a straightforward policy with higher monthly premiums. These policies differ from term life insurance because the coverage lasts until the end of your life.

It’s an option that allows you to purchase it and forget about it as you move on with your life. Your premiums will stay the same throughout the coverage, and the death benefit amount shouldn’t change.

Whole life insurance covers your entire life and grows in value as you age. It’s an excellent option if you want a simple policy to set up and move on with your life. You’ll also enjoy peace of mind that your family is covered should the worst occur.

The primary drawback to consider with whole life insurance is the cost of your monthly premiums. If you can afford them, it’s a simple and comprehensive type of life insurance. If you’re working with a budget, avoid purchasing a whole life insurance policy.

Universal Life Insurance

Universal life insurance is another insurance option that offers permanent coverage. The thing that sets universal jumbo life insurance apart is the flexibility it provides as you move on in life. This coverage option allows you to adjust your insurance premium within specified limits.

Your policy also has a cash value that grows based on several market factors. It’s also wise to note that your premiums increase over time, so your policy will become more expensive as you age. You can opt to use your death benefit to mitigate the rising costs or face the higher payments as they rise.

The primary benefit of universal life insurance is the fact that you get similar coverage to a whole life insurance policy at a cheaper rate. You can adapt your coverage needs as you grow older, and those needs change. It’s one of the most flexible types of life insurance plans you can choose to provide for your family after your death.

The main drawback of this option for life insurance is the possibility that the death benefit does not grow over the years. Don’t count on the money you receive growing like it would with other types of life insurance.

Variable Life Insurance

Variable life insurance is the best route to take if you have a higher risk tolerance with your life insurance policy. It’s a type of cash-value insurance coverage, and the premiums are fixed. The death benefit is also guaranteed when you invest in variable life insurance for your family.

A financial planner or advisor will help you find the perfect variable life insurance plan based on your coverage needs and budget. You have the potential to make some significant gains with this life insurance option, especially if your investments do well.

The drawback is that it’s the most involved option for life insurance. You’ll need to be hands-on with your insurance policy to ensure it continues growing.

Burial Life Insurance

You should consider burial life insurance if you want to help cover the costs of your funeral, burial, and after-death expenses. It’s a small whole-life insurance option that keeps those costs from falling on your loved ones after you pass away. The death benefit is guaranteed, and it ranges from $5,000 to $25,000.

You won’t need a medical exam to get a burial life insurance policy. It’s highly accessible for seniors with pre-existing health conditions. The drawback is the possibility that you won’t receive the full death benefit if you die a few years after purchasing the policy.

Now You’re An Expert on the Types of Life Insurance

Shopping for the different types of life insurance is a daunting task, but it’s essential to know your budget and the death benefit requirements. Term life insurance is an excellent option to cover your prime working years, while whole and universal life insurance policies protect you for the rest of your life. Burial life insurance is less expensive and covers your burial and funeral costs.

Are you ready for more essential life tips? Check out the rest of our blog page for more encouraging articles like this one today!