Types of Life Insurance

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Life insurance is a smart financial decision that everyone should choose to do. But if you aren’t a life insurance professional, how will you know where to start? Keep reading to learn all about the different types of life insurance.

There are four main types of life insurance coverage:

  • Term Life
  • Whole Life
  • Guarantee Universal Life
  • Index Universal Life

With all of these types you are provided a death benefit but they differ significantly in terms of length of coverage, premium flexibility, accumulation and distribution of cash values and other factors. Keep in mind that the specific policy will differ based on the company.

Term Life

Coverage needs: temporary period of 10-30 years

Cash value accumulation: no cash value

Premium flexibility: fixed for an initial period

Guaranteed death benefit: for length of term period coverage

Whole Life

Coverage needs: lifetime

Cash value accumulation: guaranteed cash value

Premium flexibility: fixed

Guaranteed death benefit: lifetime

Guarantee Universal Life

Coverage needs: up to lifetime

Cash value accumulation: interest crediting rate set by the insurance company

Premium flexibility: flexible

Guaranteed death benefit: lifetime coverage or “dialed down” to any length of coverage

Index Universal Life

Coverage needs: up to lifetime

Cash value accumulation: interest crediting rate can be linked to the percentage change of an index

Premium flexibility: flexible

Guaranteed death benefit: guarantees typically range from 10-30 years

 

If you are interested in getting life insurance contact us at Tom Jones Financial.