Two main types of life insurance policies exist. To discover which policy is best for you it is important to do thorough research. Term life and whole life policies both pay similar benefits to policy beneficiaries once the policyholder dies. A significant difference between the two types of policies involves whether or not the policy expires after a specific term limit is reached.
Term life insurance stays active for a limited policy term.Terms last up to thirty years in length. Shorter terms for as little as one year also exist.Death benefits range from approximately $50,000 up to multiple millions of dollars. Death benefits are only paid out to beneficiaries if the policyholder dies inside the term limits.
Whole life insurance is more complicated in certain ways. No term limits, and policies remain valid as long as premiums are paid in full.
Whole life insurance includes universal, final expense, simplified issue, guaranteed issue and group insurance policies.
The inclusion of potential annual dividends, tax deferrals and cash values are possible with this type of life insurance as well.
Death benefit payouts and amounts are similar to those of term life insurance, however.
Discovering which policy is best for you also depends on the insurance company. Premium amounts, company reputation and credibility with consumers are just as important as the specific type of policy you choose. For example, choosing a final expense insurance policy could offer the best type of policy for your needs. Some companies have unethical intentions, however. Purchasing from a company you did not research potentially costs you money, and leaves no benefits to you or your family.
