Life Insurance Products Explained

There are several different life insurance products available designed to meet a variety of needs, but many people are not aware they exist. ?Some of these products can provide short-term coverage, while others work more like an investment account and have a cash value, or they can also be a combination of the two. ?Policies may only cover certain scenarios or conditions, and premium price is generally dependent on the type of product that is purchased, plus the health and age of the policyholder. ?Some policies even pay out if there is a critical illness diagnosed, in addition to providing a death benefit.

Term Life Insurance

Term life insurance provides temporary coverage over a designated period of time, and it is a popular choice of life insurance. ?It is inexpensive and can be purchased in large sums, making it the ideal solution for families starting; they can cover expenses, children’s educational needs, and mortgages in the event of a death. ?There is a large tax-free lump sum given to beneficiaries if the policyholder dies within the specified time period, or term, but there is no maturity value at the end of the contract. ?A term life insurance product is available in Level and Decreasing coverage, which can be explained in depth by an agent.

Universal Life Insurance

Universal life insurance is a permanent insurance that receives a tax-deferred interest rate and has a cash value. There are flexible premiums and adjustable benefits so that, as life changes, coverage can change as well. Any extra money that goes to the account increases the cash value and death benefit value. ?If there is a period of time when money is tight, this type of life insurance product lets the policyholder pay less than the scheduled premium and the accumulated cash value will cover the remainder of the monthly charge.

Whole Life Insurance

Whole life insurance is also a permanent life insurance product that stays in good standing as long as the policyholder is alive and the premium payments are met. There is a fixed death benefit and an accumulated cash value that can be borrowed against if the policyholder needs money. ?If the policy is surrendered, there are three non-forfeiture options available to the policyholder and family. Any accumulated cash value, minus any loans, can be received in a lump sum, the policy can be transferred to another policy with a lower death benefit utilizing the cash value, or the policy can be transferred into a term life policy with an equal death benefit.

Critical Illness Life Insurance

A critical life insurance product can be a stand alone policy or an optional add-on to other policies; either way, there is a death benefit available to beneficiaries with this type of policy. ?However, a lump sum can also be paid if there is a diagnosis of specified critical illnesses or injury. ?Premiums are set and will not increase while the policy is in effect; as a result, the benefits can be used for any reason. ?Having this type of protection can provide peace of mind during a stressful and traumatic time in people’s lives.

Regardless of which type of insurance policy is best for your situation, having a life insurance policy in place is incredibly important. ?It can provide the loved ones about with a way to help pay expenses, medical bills, and funeral costs if something happens. ?Accidents and illnesses happen without warning and picking the right type of life insurance product can be a wise financial investment. It helps those who are left take care of what is left in the wake of unexpected tragedies.

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