subject: The 4 Main Types Of Life Insurance [print this page] There are four major types of life insurance from which clients can freely choose. Prior to considering a particular policy, it's essential to understand the requirements and advantages of all four.
The first type is the Term Life cover, which is a clear-cut type of insurance. Whenever you go for this type of insurance, you always end up paying for specific time durations. Within that period, your selection or list of beneficiaries will receive the benefits and coverage of your life policy in the event of your untimely death. Also, you should take note that there are several subcategories that are classified under a term life insurance.
For instance, you may prefer to choose a yearly renewable term life premium, which clearly is a policy that you renew annually. Due to the possibility that the policy price and premiums might increase as you get older, consumers may prefer to avoid the idea of a renewable annual policy and look for something that will guarantee them a level term life insurance. These types of life insurance policies usually stay the same and do not go beyond its pre-mark price for a definite period of time, which normally range from 5 to 30 years, depending on the time duration span that you have selected.
The most recently launched and introduced type of term life cover is the ROP, the return of premium term life insurance. This type of term insurance pays the value of the insurance if you are still living. Otherwise the term of payments or funds will be received directly by the beneficiary.
The Whole Life policy is one of the four major types of life coverage that you can consider. This type of insurance policy covers you fully, instead of just protecting you in a specified time frame. Whole life insurance plans are usually more expensive than term life policies, but still the investment potential and lifelong coverage of a whole life insurance policy appeals more to a number of insurance shoppers.
Included in the four distinct types of life cover is the Universal life coverage. With this type of policy, you can simply add your choice of amount to the minimal price of the premium. The insurance provider then spends the funds with returns, which are essentially put into premiums or are left to add up by themselves. One sub-classification of the universal life insurance is the universal variable life, which allows customers to choose on what they initially want to invest in, instead of leaving all the decisions to their insurance company.
Another type of life cover is the Variable Life. With Variable life policy, you are given greater selections and opportunities for investments, and that includes stocks. This type of policy is quite similar to the Universal coverage, as this policy's returns can either be used up for premiums or is permitted to accumulate in the customer's account.
by: John Philips
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