Types of life insurance you can buy - Part 9
By admin on March 1st, 2010There are essentially (5) different types of life insurance that you can buy.
TERM LIFE INSURANCE- This is a basic plan that is usually the cheapest to obtain. It’s great for people without many assets-but who have financial dependents. But it provides funds for your dependents only if you die within the insured period.
WHOLE LIFE INSURANCE- This plan offers lifelong protection. It works by setting a premium that is based on your age upon purchasing the policy. Premiums are usually higher in the beginning. But that is only because premium costs generally increase with age. Thus, the premiums are higher in the beginning to "cover" those costs.
UNIVERSAL LIFE INSURANCE- This plan is essentially a cross between term life and a savings fund. You pay a yearly fee for the plan, and the interest earned on your savings is tax deferred.
VARIABLE LIFE INSURANCE- This policy is based on investments that a person has. Though there is a minimum death benefit, the payout could increase based on the strength of the investments it’s drawn from (mutual funds, stocks, etc.).
VARIABLE UNIVERSAL LIFE INSURANCE- This policy is a mix of Variable Life and Universal Life Insurance. The policyholder is allowed to choose which investments to draw benefits from. But with this plan, you are allowed to adjust your premiums.
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