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What are the different types of life insurance policies?

 

 

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The first type of life insurance is a term life insurance policy. You can select a term life insurance policy, but this policy is essentially supposed to cover someone’s short term needs. For example, a policyholder was to be in a terrible accident, he is able claim the insured amount. It also pays the deprived in the event of a death in the family. With all of that, this policy helps cover any possible need for life insurance in a shorter run.

 

Term life insurance is mostly a convertible and renewable policy. It can range from 1 to 100 years. If it’s a single year policy, then the fee for coverage will rise after every year you renew it, until it expires. Normally, the expiration on a policy is at 75 years old. Though it is a term policy till the age of one hundred with its cash value it consequently becomes a Whole Life Insurance policy. Usually it is found that it is more cost effective in the long run to get a whole life insurance policy rather than a term life insurance policy.

 

The second type of life insurance is permanent life insurance. With this type of life insurance policy, it covers the total life length of an individual. The cost of this policy rises through the whole time frame that one partakes in the program. Words like Non Par and Par are commonly found in this context of insurance.

 

Par whole life insurance creates dividends to the fractional return of the paid premium as part of the investment growth and coverage. The total of dividends always changes annually. But for non-par whole life insurance policies, they do not have any dividends. The cash values for these policies are not constant, but are guaranteed or assured.

 

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