There are many kinds of life insurance, but they generally fall into two categories: Term insurance and Permanent insurance.
Term Life Insurance
Term life insurance policies are designed to provide temporary protection at an affordable cost — particularly in the earlier years. The contract between the policy owner and the insurance company is for a specific period of time, such as 10, 15 or 20 years. Term policies deliver pure death benefit protection and appeal to those seeking cost-effective, temporary coverage.
Permanent Life Insurance
Permanent life insurance, including Whole Life, Universal Life and Variable Universal Life, provides coverage for an insured's lifetime and remains in force until the policy matures provided that the required premiums are paid. Many of these policies are designed to generate cash value that accumulates tax-deferred, which can be used to supplement retirement income or cover college expenses. Your financial professional can work with you to decide which policy is right for you.
Whole life policies pay a death benefit, specified at the time the policy is purchased. The premiums paid into the policy are level, which means the premium amount never changes.
Univeral Life offers significant flexibility – to change the level of coverage, or to stop and resume premium payments.
Variable universal life policies provide universal life insurance protection, but also investment flexibility.
Survivorship life insurance policies are designed to cover two lives, instead of one. These policies, available in universal life and variable universal life designs, pay a benefit after the death of the last insured to die.
It's impossible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals.
But remember, the best way to figure out the amount and type of life insurance that makes sense for your particular situation is to meet with a qualified life insurance professional.
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