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Types of Life Insurance Policies

Life insurance is one of the best safety nets you’ll ever buy for your loved ones. It’s one of the only ways you can guarantee your loved ones have the money they need, even if something awful were to happen to you. Not having life insurance is one of the worst mistakes you could make for your loved ones. Without that safety net, your family would be stuck under a mountain of debt and other final expenses, but that’s where your life insurance plan comes in.
When you’re shopping around for life insurance, it’s important you compare all of the different options available. Each kind of life insurance is going to have different pros and cons you’ll need to weigh based on your insurance needs. It can be confusing and frustrating trying to find the perfect plan for you, but that’s why we are here to help. It’s our mission to ensure you’re getting the best plan available. This post (and the video below) are going to look at some of the main types of plans and the benefits of these policies.
In the video below I discuss the different types of life insurance policies that you may be considering and which may be the right choice for you.
There are three main categories of life insurance. Each of them is slightly different in the coverage they provide and how much they cost.

Term Life Insurance

The first type we are going to look at is term insurance. Term is the most traditional kind of life insurance. It’s the best way to get life insurance protection at an affordable price. Term gives you the most bang for your buck.
These policies are bought for a certain amount of time. Every insurance company sells different lengths of term plans, but most of them are sold anywhere from 5 years to 30 years. After those years are up, the plan is no longer effective. If you want life insurance protection, then you will need to reapply for a new plan. These policies are excellent for young applicants who want to get affordable life insurance.

Universal Life Insurance

The next type of life insurance is universal life insurance. Unlike term plans, these are permanent forms of coverage, meaning they are never going to expire. As long as you pay the premiums for the plan, you have life insurance.
Universal life insurance has several unique advantages you won’t find with other types of insurance plans. These plans build cash value inside of them, and that cash value can be used to invest. Another benefit of these plans is how long they last. Every “permanent” life insurance policy is not the same. Some of them actually only last until you’re age 89 or 90. Most universal plans are going to be effective until 101 or longer.

Whole Life Insurance

The last type of life insurance category we are going to explore is whole life insurance. As you can guess from the name, these plans are another permanent kind of life insurance. Just like with universal life insurance, whole life insurance builds cash value. You can use that cash value to pay the premiums for the policy or to secure a loan if you ever need one.
One of the major pitfalls of whole life insurance plans is they are going to be more expensive. In fact, whole life insurance tends to be the most expensive option for life insurance protection.
Which Type is Best for You
There are several different factors you’ll need to compare when trying to decide which type is best for you. The first thing you should look at is how long you’ll need coverage. If you’re getting close to retirement and your children have moved out of the home, then you might only need coverage for a couple of years, which would make a short term plan the best option.
Another factor to look at is how much you can afford to spend on your life insurance. The purpose of your life insurance is to give your loved ones the money they need if something were to happen to you, but that plan shouldn’t stretch your budget too thin. Before you buy a life insurance plan, take the time to look at your finances and decide how much you want to pay every month for your plan.

Working with an Independent Insurance Agent

Every insurance company is different, and all of them are going to offer you different rates and have different life insurance protects
they offer. It’s vital you find the perfect plan for you and your family. There are over 800 companies on the market, and finding the best company and plan for you is the difference in getting an affordable plan or one that’s going to break your bank every month.
Instead of wasting hours calling those companies yourself, let one of our independent insurance agents do all of the hard work for you. We work with dozens and dozens of highly rated companies across the country. We know which companies are going to offer you the best rates based on your health and life insurance needs. Working with one of our independent brokers can save you both time and money on your life insurance coverage.
You never know what’s going to happen tomorrow, which means you shouldn’t wait any longer to get the life insurance protection you and your family deserves. If you have any questions about life insurance or the various types of plans, please contact one of our agents today. We can answer those questions and connect you with the best possible plan for you.
 

 

Transcript: Types of Life Insurance Policies

So if you're thinking about getting life insurance, you're probably trying to think about what types of life insurance coverage makes sense for me.
Well, there's 3 main types of policies out there, let's go through them.
Term- Term Life insurance basically is temporary coverage for a set amount of years. Its the cheapest form of life insurance coverage that you can get, and its going to cover you for a set amount of years. Think about 10, 15, 20, 30 years of coverage.
Its good for a lot of people, it covers you for the years which you might you need it most, maybe if you have young children, or maybe if you are a little bit older and you're nearing retirement. You want to make sure you have coverage until retirement, term life insurance would be the way to go, and it covers you for a set amount of years.
Next type is Universal Life insurance. Universal life insurance is a form of permanent insurance, and might have some build up of cash value depending on the coverage you get. Generally when people need permanent lifetime coverage, i recommend getting something called, guaranteed universal life, which is basically a lifetime term policy. What does that mean? It means you have coverage until age generally either 100 or 121, depending on the life insurance company and basically you have coverage for ever. You pay the same premium, your premium never ever goes up and you have coverage for ever. Some people like to know that they have coverage for the rest of their life no matter what, and guaranteed universal life is the way to go.
And then lastly you have whole life insurance. Whole life insurance is your most, let's say "expensive" type of life insurance coverage that's out there, and whole life insurance builds cash value and has some other guarantees with it. Generally this is going to be your most expensive option and most people are not going to go with this type of life insurance. What I advise most people is generally look into term life or guaranteed universal life. Most people end up getting mostly term life insurance, and maybe they get some form of permanent insurance called guaranteed universal life, but chances are if you have young kids, if you're looking to get the most coverage for the money you're going to end up going with term life insurance. If you're looking for a quote visit our website chooseterm.com.
Author: Liran Hirschkorn