Types Of Common Life Insurance Policies You Can Choose From
Many people invest in life insurance policies to make sure that their families are protected financially in case they die unexpectedly. You can create a safety net for your loved ones by having yourself insured and naming family members as the beneficiaries of your policy. Upon your death, your beneficiaries can receive the specified amount of money stated in your life policy.
To find the appropriate policy for you, consider comparing life insurance rates from various providers. The “rates” refer to the premium payments or the amount of money you pay the insurance company each month for your policy. You can get a quote on insurance rates from an insurance agent or from the internet. Usually price quotes are free and you can get several quotes from various companies online.
This gives you a chance to compare prices, coverage, benefits and different kinds of insurance plans. There are various types of life policies such as a term life, whole, and endowment among others. One of the most common policies that people get is the term life policy. This type of coverage is commonly purchased and popular due to its affordability.
A term life insurance plan remains active for a limited time only unlike permanent policies that are active until the death of the insured person. Term life beneficiaries can get a lump sum amount if the insured dies within the policy’s term or while the coverage is active. This kind of coverage is usually bought to cover mortgage and loan payments after the death of the bread winner in the family.
Whole life policies are another common type of life plan. This coverage remains active until the death of the insured as long as all necessary payments including the premiums were made. The only thing that can invalidate this policy is an intentional cancellation. The policy gives beneficiaries a fixed amount set in the policy plus cash value from premiums paid.
An endowment or permanent plan pays a lumps sum of money on the pre-set date specified in the policy or after the death of the insured, whichever comes first. Endowment life insurance rates are typically more expensive than other kinds of life policies such as term or whole life plans. On the other hand this type of coverage offers additional benefits like down payment for a house or college tuition funds.
A universal life policy is another version of the whole life plan that gives out a cash value from the account. The cash savings in the account earns money market interest. The insured can use this money to reduce the premium payments or to fund the total amount for the premiums. The cash can also be used to pay out to the beneficiaries upon the death of the insured.
These are the most common types of life insurance policies you can choose from. There are a few more that are not as popular but are useful and suitable for some people just the same. Some of these are the variable and annuity life policies. Talk to an agent or study your options online to find the most suitable coverage for you and your beneficiaries. You can also find out about life insurance rates online.