Types Of Life Insurance

Basic types of life insurance:
*  Term insurance :-Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future.
*  Cash value insurance.:– You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income.

Term Insurance
Term assurance provides life insurance coverage for a specified term of years in exchange for a specified premium. Term insurance generally offers the largest insurance protection for your premium dollar.These policies do not have accumulate cash value – CV. Term is generally considered “pure” insurance, where the premium buys protection in the event of death and nothing else.

There are three key factors to be considered in term insurance:
1.Face amount
2.Premium to be paid
3.Term of coverage

Cash value life insurance
Cash value insurance is a type of insurance where the premiums charged are higher at the beginning than they would be for the same amount of term insurance. The part of the premium that is not used for the cost of insurance is invested by the company and builds up a cash value that may be used in a variety of ways.  If you don’t pay back the loan and the interest on it, the amount you owe will be subtracted from the benefits when you die, or from the cash value if you stop paying premiums and take out the remaining cash value.

Permanent Life Insurance
Permanent life insurance is life insurance that remains in force for life of insured, unless the owner fails to pay the premium when due . The policy cannot be canceled by the insurer for any reason except fraud in the application. Permanent insurance builds a cash value. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

Permanent insurance :-
*  Whole life,
*  universal life,
*  limited pay
*  Term-100.

Universal life coverage
Universal life insurance (UL) is kind of flexible policy that lets you vary your premium payments. A relatively new insurance product intended to provide permanent insurance coverage with greater flexibility in premium payment and the potential for greater growth of cash values.

*  Both the premiums and death benefit are flexible.
*  Reduced guarantees.

Whole life coverage
Whole life insurance provides for a level premium, and a cash value table included in the policy guaranteed by the company. You
generally pay the same amount in premiums for as long as you live. When you first take out the policy, premiums can be several times higher than you would pay initially for the same amount of term insurance.

Advantages
*  Guaranteed death benefits,
*  Guaranteed cash values,
*  Fixed and known annual premiums,
*  Mortality
*  Expense charges

Disadvantages
*  Premium inflexibility, and the
*  Internal rate

Limited-pay
Another type of permanent insurance is Limited-pay life insurance, in which all the premiums are paid over a specified period after which no additional premiums are due to keep the policy in force. Common limited pay periods include 10-year, 20-year, and paid-up at age 65.

Term 100 are pure Life Insurance with level premium till age 100; however they have no cash value in this policy.

Term | Whole Life | Universal Life Insurance