Although all life insurance policies have similar traits they do vary somewhat to suit the different needs of the insured and their beneficiaries. In the main there are four common policies and they are as follows:
Term Life Insurance
Term Insurance is purchased for an agreed and specified period of time. The term can vary from a one-year term to a period of well over twenty years. The insured makes regular payments and if he dies whilst the policy is active then his named beneficiary receives his death benefit. If however the insured survives the term of the policy the term life insurance policy ends without any payouts being made.
Whole Life Insurance
Whole Life Insurance lasts the lifetime of the insured. By paying regular premiums the insured accrues a cash value for the policy. The cash value is inclusive of interest and can either be cashed in or saved in the policy to be paid out to the insured beneficiary upon death.
Universal Life Insurance
A Universal Life Insurance policy is a more flexible policy, as it is possible to vary the regular payment amounts. The only requirement is that the policy has a cash value which is more than it's costs. By varying the payments the insured can change and modify the value of the policy's end payout according to their and their beneficiaries needs.
Variable Universal Life Insurance
Variable Universal Life Insurance has the aspect of flexibility of Universal Life Insurance and it also offers a choice of investment benefits. The premiums of the policy are invested in a number of investment options and the value of the policy is determined upon how the investments perform.
The four policies offer different benefits and advantages and it is up to the insured to decide which options are best for them and also their beneficiaries. A simple basic Term Life Insurance may be the best choice for some but others may prefer to have a policy offering more features and benefits such as investment options or the ability to change the value of the payout.
