Buying life insurance may seem a little confusing, because there could be many different types of life insurance available. So let us explain about the various life insurance types that are available, and answer some of the most frequently asked questions we receive.
What different types of life insurance are there?
Basically, there are two popular types of life insurance – term life and permanent life. There are several variations and subcategories of these types of life insurance, but these are among the most basic.
What is term life insurance?
Term life insurance is one of the two main types of life insurance. It provides you coverage for a set term or time frame, such as terms for 10 years, 15 years, 20 years or in some cases, even 30 years! If you were to pass away during the specified time frame, your loved ones would generally receive the benefits of your policy (if designated as beneficiaries).
Are there different life insurance types of term life insurance?
Yes. One of the different types of life insurance is an annually renewable term life policy. You might be able to determine to renew (or not to renew) the policy on an annual basis. But since the premiums may go up as you age, you might want to lock in a longer term rate, instead of choosing a guaranteed level term life insurance policy. With this type of policy, the rate generally stays the same for a set time period of time.
One of the newest life insurance types is known as return of premium term life insurance. The way it works is that if you are alive at the end of the term, it could pay out an amount to you. If you should pass away, the policy amount will generally pass on to your beneficiaries.
What about other types of life insurance? How does permanent life insurance work?
Permanent life insurance sounds like the name – this may cover you for your entire life, not a term. However, the premiums may generally be higher than for term life insurance. There are several different types of life insurance in this category.
One of the most popular forms is called whole life insurance – like the name implies, it covers you for your whole life, instead of a term. Generally speaking, it may cost more than term life insurance.
With universal life coverage, you can generally add an amount to the premium’s minimum as an investment amount. There’s also variable life which may also let you choose what you want to invest in rather than having the insurance company choosing for you.
Where can I get quotes for life insurance?
Just fill out an online form and we can find you free, no-obligation quotes for life insurance.