Types Of Life Insurance Explained

Types Of Life Insurance Explained, When you boil it down there are really only two kinds of life insurance temporary coverage which is called term insurance and permanent assurance both term and permanent life insurance comes in various different shapes and flavors to satisfy different needs permanent life insurance is designed to provide coverage for as long as you live if your needs are long-term like a state planning or final expenses or if you just wanna leave a bigger legacy no matter when you die permanent insurance is probably the way to go there are lots of different kinds of permanent assurance but the two primary categories our whole life and universal life and.

I'll come back to these in a minute term life insurance is by definition temporary insurance it's designed to provide coverage for a limited period of time typically 10 20 or 30 years term policies are simple and extremely inexpensive in most cases your costs each year is guaranteed to remain level for whatever the term is again typically ten twenty or thirty years after the terms over make sure you're sitting down when you receive your premium notice is your rates are gonna jump up dramatically sometimes by a factor of as much as 10 or more but some of these policies have a built-in conversion option that allows you to trade in your term coverage for a shiny new permanent policy term life make sense if you know when you're going to be financially independent or if you're sure there's some date down the road where no one will be depending on you anymore financially like when your kids are all grown up in your mortgage is paid off term is also good when you're younger and your biggest concern is getting the protection in place and keeping your costs down if you're a non-smoker in your thirties and healthy you can buy it twenty-year $250,000 term policy for less than $20 a month sound too good to be true well it's a hundred percent true.

 Now back to permanent life insurance whole life and universal life insurance are more expensive than term but let's take a look at what you're getting for the money on like term insurance permanent insurance is generally designed to last forever you can outlive a permanent life insurance policy with most permanent policies as long as you pay your premiums on time your family is guaranteed to receive the death benefit no matter when you die whether that's tomorrow or fifty years from now on like term insurance permanent insurance policies can also build cash surrender values which can be accessed at any time for any reason you can set up your premiums to remain level for life guaranteed you won't have to worry about premiums going up when you get older and forcing you to drop the policy nor will you have to worry about being healthy enough in the future to re- qualify or replace the coverage if you like you can also arrange to pay for the policy over a shorter period of time say ten years.

So that after that you own the coverage and no further premiums are due for the rest of your life universal life insurance one kind of permanent life insurance offers a certain amount of built-in flexibility you have the ability to change your premiums and benefits to keep pace with changes in your life whole life insurance is what I refer to as the Rolls Royce of life insurance whole life costs more than all the other types of life insurance we've discussed but it does more over time these policies developed significant cash get cash values that are guaranteed and can be accessed at any time regardless of what happens in the economy each year the cash values grow guarantee what's the best kind of life insurance that's actually a tough question and an easy question different people have different needs if there were really only one best kind there would only be one kind I actually own all three types of life insurance we discussed today my whole life policy for example I bought 25 years ago I pay $35 each year right now it has a cash surrender value of $217,000 better than a lot of my other investments for sure in the end the best kind of life insurance to own is the kind that's in force on the day you die if your policy is not enforcing the day you die you bought the wrong kind for most people the best way to make sure that happens is to own a policy with an affordable level premium for life I hope this quick overview is helpful if you have any questions please dial the number on your screen you'll speak with a real live person with experience with answers and it cares thanks for watching