Nowadays, there are so many life insurances to choose from. The internet is filled with so many details on what life insurance will be the best for you.
With this information overload, it can get a little bit overwhelming. We’re here to simplify everything for you. In this article, we will discuss the different types of life insurance plans.
The Most Common Types of Life Insurance
● Term life insurance
● Whole life insurance
● Universal life insurance
● Simplified issue life insurance
● Guaranteed issue life insurance
● Group life insurance
Why Should You Get A Life Insurance?
Life insurance gives you something to fall back on in case things go wrong. It gives you and your family choices by providing the benefits to help with a lot of money problems. For instance, insurance can help you settle debts, it can also help you meet housing payments. Life insurance can also help fund your children’s education, and more.
Types of Life Insurance Plans
Term Life Insurance
This type of insurance is suitable for most people. It has policies that last for a specific number of years. Most of the time with term life insurance, your policy will expire with no payout if you don’t die within the time frame specified in the policy.
It is typically sold in different lengths. For instance, you can get term insurance for 1, 5, 10, 15, 20, 25 or 30 years. The coverage depends on what policy you decide on getting.
Permanent Life Insurance
On the other hand, there’s permanent life insurance. This type of insurance policy lasts your entire life. Usually, it also provides a cash value component. You can choose to withdraw or borrow against this cash value while you’re still alive.
In a permanent life insurance, you have a guaranteed rate of return on your policy’s cash value. Most of the time, it also provides a death benefit amount that’s set.
Universal Life Insurance
This type of insurance provides a guaranteed death benefit. It also doesn’t change your premiums, they are set. Typically, there’s no cash value within the policy. This type of life insurance is cheaper than other types of insurance.
Simplified Issue Life Insurance
Then, there’s the simplified life insurance which doesn’t require you to take a medical exam. Usually, you will be interviewed by an insurance agent and you will be asked a few health questions.
Your approval will depend highly on your answers. It’s a quick process, too, because it uses algorithms and big databases to speed things up.
Guaranteed Issue Life Insurance
This type of insurance doesn’t require you to take a medical exam. It doesn’t ask health questions, either. It’s pretty much an auto-approval as long as you fit within the eligible age range. Usually, this age ranges from 40-85.
The downside is that coverage amounts are usually low. The life insurance fee is also high.
Group Life Insurance
Another type of life insurance, the group life insurance is usually offered by employers as a part of their workplace benefits. Typically, employers offer the basic coverage fee for their employees. However, if you need more coverage, you can choose to purchase supplemental life insurance.
