TYPES OF LIFE INSURANCE

When you’re done reading, let our life insurance professionals walk you through your best fit.

There are numerous types of life insurance policies available for consumers. If there is a point in your search for life insurance where you become uncertain in your quest, it’s here. My advice is to not get lost in the types of insurance available as this is something that we’ll work on together to fit your need. I’ve listed term life insurance at the top purposefully as this is where your search for coverage will most likely begin. Term insurance is the absolute best way to get your life insurance started and your dependents protected today. Here’s the great thing, if you find that you would like a different type of coverage in the future, your term can be converted to other types of life insurance typically with a signature, no underwriting and without having to re-qualify for coverage at a later date. Our goal is for your family to be protected. The best place to start is with term life insurance.

Term Life Insurance

The most popular type of life insuranceĀ is term insurance. The appeal to term life insurance is that you can purchase a great deal of coverage for much less money. Term insurance is very straightforward as you agree with an insurance company to pay your premium in return for an agreed upon death benefit. Most of the online ads that you see promising a gazillion dollars in coverage for as little as $12 per month are term insurance ads. Think of term insurance as renting your coverage for a period of time. The period of time is referred to as, the term. Common terms are 1 year, 10 years, 15, 20, 25 and 30-year terms. Your term insurance is the best place to start in getting your coverage in place. As you select your policy, you want to have a policy that is fully convertible. Conversion allows you to take a portion of yourcoverage, or all of it, and convert the benefit into some form of permanent insurance policy. Make it a point to ask your agent about conversion options as some companies are much better about their conversion privileges and the options available.

Whole Life Insurance

Probably the permanent policy you’ve heard of or are most familiar with. Whole life insurance offers you life-long coverage with the option to accumulate cash value that can not go down. The cash value in whole life, life insurance grows at a very conservative and consistent rate of return. Too much money allocated to whole life insurance can be a bad thing but you can make a great case for getting a stable rate of return on your savings or rainy day fund. The death benefit for whole life insurance is generally much lower than term life insurance and is more expensive as some of your premium goes to support the life insurance and some to the accumulation.

Universal Life Insurance

Universal life insurance was created as an alternative to whole life insurance more than twenty-five years ago. Universal life policies offer flexible contributions, cheaper premiums than traditional, whole life and in some cases, more opportunity for cash accumulation.

Guaranteed Universal Life

Think of guaranteed universal life as permanent term insurance. If you like the cheaper premium of term insurance and are not concerned with using your life insurance for cash accumulation, but like the idea of having permanent life insurance, guaranteed life insurance is for you. The premium for GUL is more expensive than term life insurance but more affordable than whole life or universal life insurance.

No Exam Life Insurance

This is a popular type of insurance for people that typically don’t have the time to go through an exam or are afraid of needles. Generally speaking, your death benefit will be smaller (usually less than $400,000) and the premium will be more expensive for a healthy person as you’re automatically given standard rates. If you’re a genuinely healthy person, there are life insurance companies that offer larger amounts of coverage as well as preferred rates. Contact me and I can walk you through this as the process is different than the regular life insurance process.

Guaranteed Acceptance Life Insurance

Think of guaranteed acceptance life insurance as funeral insurance or burial insurance that our grandparents would have bought. Regardless of how unhealthy you are or whether or not you’ve been declined previously, you will qualify for this type of insurance. The premiums will always be more expensive as the policyholder will pay ~200% more than a healthy person would pay due to have to price in unhealthy people. The other drawback is that most guaranteed acceptance companies only offer benefits up to $25,000.

Still, have more questions? Call or text your questions at (205) 578-2097