Insurance Information

Types of Life Insurance

Life insurance comes in many different shapes and sizes.  The links below navigate to comprehensive explanations of the different types of life insurance available on the market today.

Term Life Insurance
Whole Life Insurance
Universal Life Insurance

Special Life Insurance
Special Purpose Life Insurance
Business Life Insurance
Special Risk Life Insurance
Other types

Term Life Insurance

Term life insurance is the variety of life insurance which most people envision and which best meets most buyer's needs.  It provides coverage only for a limited number of years, and the policy owner pays an unchanging premium for the duration of the term of coverage.  (The alternative to term life insurance is permanent life insurance, which encompasses whole life insurance and universal life insurance.)

 

Whole life insurance

Whole life insurance is the priciest of the three principal types of life insurance (term, whole, and universal), but it guarantees a death benefit, guarantees a cash value growth rate, and guarantees a fixed premium.  Buyers are attracted to the guaranteed death benefit and the minimal risk of lapse.  Unlike universal life insurance (the other variety of permanent life insurance) in order to prevent this policy lapsing, the policy owner has only to make regular payments of a fixed premium, just as though this were a simple term life insurance policy.

 

Universal life insurance

Universal life insurance is permanent life insurance which offers the policyholder the most flexibility but also requires the most vigilance in order to keep the policy on track.  It is more expensive than term life insurance but less expensive than whole life insurance.  With universal life insurance, there is no set schedule of payments and the growth of cash value is not fixed.  In order to ensure that the policy remain in force, the policy holder must attend to the amount of cash value saved up and at all times maintain enough to meet the insurer's charges.  Because universal life insurance is funded quite differently from other types of life insurance, any interested reader had better go to the universal life insurance page for a more thorough explanation.

 

Special life insurance

Some of the foregoing types of life insurance fit into categories besides the three main categories of life insurance.  The following links provide explanations for types of life insurance that don't fit neatly into the main categories.

 

Special purpose life insurance

Some types of life insurance are designed to help people meet particular life insurance goals, such as paying off a mortgage in case of the death of a wage-earner.  Here are a few pages devoted to such life insurance policies.

 

Business life insurance

Life insurance is used not just to protect families but also to protect businesses against financial catastrophe from the death of a valued member.  Not only that, business life insurance can be used to incentivize or reward employees.

 

Special risk life insurance

Some life insurance shoppers have difficulty obtaining the coverage they want because they represent an above-average risk, which insurers cannot afford to cover at standard rates and may not consider insuring under a standard policy at any rates.  Such individuals can still obtain coverage under life insurance products designed especially for individuals with increased mortality risk, those whose health is poor or who participate in hazardous activities.

The price of some of the following types of life insurance is great, so careful assessment of probable returns versus costs should be carried out before resolving upon any purchase.  However, even if one of the following products proves cost ineffective for your purposes, you may find another one to be ideally suited to your needs.

 

Other types

Here are a few types of life insurance which didn't fit neatly into the categories above.

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Term Life Insurance
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