| While life insurance is really more of a necessity than a luxury, not all life insurance policies are alike. Careful research and inspection of the available types of life insurance policies will be in your best interests if you’re in the market for a new policy. Not all life insurance policies offer the same benefits, after all.
Among the many options of life insurance policies, there are four basic types of life insurance from which to choose: Whole Life, Variable Life, Universal Life and Universal Variable Life. For those of you who are confused by the various types of life insurance, here’s a brief description of each that may help you to make the best choice to meet your needs, as well as your budget.
Whole Life Insurance
This type of policy will not only pay the designated benefit amount to your beneficiary upon your death, but will also provide you with dividends during your lifetime. These can either be applied toward your policy in an effort to reduce your premiums or you can receive the dividend amount in the form of a direct pay out to you. The premium amount for this type of life insurance is fixed and will never change – provided you don’t change the provisions of your policy – for the duration of your lifetime.
Variable Life Insurance
In addition to paying the designated amount of your life insurance policy to the beneficiary upon your death, this type of life insurance policy also allows you to borrow money from the policy during your lifetime. While it doesn’t offer you flexibility in the areas of premium amounts or face amounts, it does provide an opportunity for a tax-free accumulation of monies.
Universal Life Insurance
Universal life insurance is a much more flexible type of policy, in that it allows flexibility in the areas of premium and face value amounts, unlike variable life insurance. In addition, you have the opportunity to borrow – or simply withdraw – cash from your life insurance policy during your lifetime. As with all life insurance policies, your designated beneficiary also receives a pay out upon your death.
Universal Variable Life Insurance
This is the most flexible of the life insurance policies, in that it offers more freedom to manipulate the cash value. Opportunities for investing through stocks, bonds and money markets are available with this type of life insurance policy, and the cash value and premium amounts are flexible. One of the drawbacks of this type of insurance policy is that a penalty is imposed for early withdrawal.
For more information on life insurance policies and their types, simply type “life insurance” into the keyword area of any major search engine on the Internet.
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