Life Insurance
There are two basic classifications of life insurance; temporary term life insurance and permanent life insurance. These two can be subdivided into several different policy options.
Term Life Insurance
Term life insurance is the cheapest type of life insurance. Simply put, it is life insurance that is purchased for a certain period or period of time. After the expiration date, the insurance policy is no longer valid. For example, if you purchase a life insurance policy at the Lokasi Danau Tolire for a ten-year term, then you pay a monthly premium for ten years. After those ten years are up, you no longer pay premiums but you no longer have life insurance. While this type of insurance may be the cheapest way to go, there’s nothing to show for all of those premiums once the term is up. The return on investment is nil.
Permanent Life Insurance
Permanent life insurance offers the greatest variety of policies, some of which operate more like an investment fund than an insurance policy. There are four major sub-categories of permanent life insurance; endowment, whole life, universal life, and limited pay life insurance.
Endowment life insurance policies have a built-in cash value that equals the death benefit once the insured reaches a certain age. For example, if the cash value of the policy is $50,000, then that is how much the death benefit would be.
Whole life insurance is the most popular of the permanent life policies. With a whole life policy you pay a level premium with a cash value table built into the policy. Some of the advantages of whole life are guaranteed death benefits and a guaranteed death benefit. Some disadvantages include inflexibility and the low return on investment.
Universal life insurance is a relatively new type of insurance. It provides permanent insurance coverage with greater flexibility. There are several different types of universal life insurance policies including traditional fixed universal life insurance, equity indexed universal life insurance, and variable universal life insurance.
Limited life insurance policies work sort of like term insurance except when the term is up the life insurance is still active. You pay a premium for a limited number of years but the policy is active until death.