Explaining the Different Types of Life Insurance
Life insurance is something many of us hear about, but never really think about buying until later in life, if ever. Unfortunately, those that often need it the most do not have coverage. We want to explain to you the different types as well as why you should consider researching rates now and obtain coverage as soon as possible.
Two Main Types of Life Insurance
While there are numerous brands of insurance, there are really only two different categories:
• Term Life Insurance
• Permanent Life Insurance
Within these two categories, different insurance companies will likely offer several different options.
Term Life Insurance
This type of policy is almost self-explanatory. When you purchase a term policy, you are getting insurance for a very specific amount of time. For instance, a 10-year term policy will cover you for exactly ten years from the date of purchase. When that period is over, the policy expires prior to death, there is no benefit payout.
Permanent Life Insurance
While a term policy expires after a specific period has passed with no death, a permanent life insurance policy lasts until the death benefit is realized (as long as premiums are paid) regardless of the time period. There are more variations in this category based on the amount of monthly premium and overall benefits the policyholder wants.
For instance, a universal policy offers the potential of steadily building its cash value over time, whereas a variable policy can grow (or shrink) according to the performance of the stock market. For most, their age and current financial stability will strongly influence the specific type they purchase.
Researching Life Insurance Rates
There is a general misconception that all companies offer the same premiums for the same type of insurance. Simply put, this is not true. Because some companies specialize in very specific types of policies, such as high risk over 50 or smoker’s policies, rates will vary from provider to provider.
Having said that, it is important to obtain adequate coverage within your budget as soon as possible. We literally never know what life has to offer and unfortunately, tragedy often strikes at very inopportune times and to those that can least afford it. Even if you only obtain a basic term policy to cover burial costs, it will at least offer the peace of mind that those left behind will not face unexpected costs related to your burial.
The SAIL Group Inc.
5301 E State St #106
Rockford, IL 61108