Life insurance protects family and love ones from unexpected cost associated with the loss of a loved one. Besides the standard funeral cost there are other protection life insurance brings, such as loss of income from losing a spouse, paying mortgage and raising children. Which type of life insurance to choose from depends on a lot of variables such as age, income, assets and family size to name a few. Below are the common types of life insurance to choose from.
TERM LIFE- Term insurance is set for a period of time (ex: 20yr term). The policy is normally cheaper that Whole life because the insurance coverage isn’t permanent. People can buy larger death benefit at a lower cost. Term is great idea for people looking to help protect family cost of living in case a spouse or significant other becomes deceased. Premiums are based on age, sex and health of policy holder at time of the application.
WHOLE LIFE– Whole Life is also known as permanent insurance, as you are coverage until you pass away. Premiums will be higher than Term insurance. Whole life will build up cash value. Cash value can be used to pay premium, take out loan against policy, paid up insurance or to surrender the policy. A lot of people use this type of insurance to make sure they have their funeral cost covered. Premiums are also based on age, sex and Health of the policyholder at time of application
GRADED WHOLE LIFE- Graded Whole Life is designed to help people who have poorer health conditions. There is limited underwriting on these policies. Premiums are higher due to the greater risk because of health. Most plans have a two-year exclusion, where if the policyholder passes away within the first two years, the beneficiary will get the premium back plus interest. If policy holder passes after two years, It will work just like regular Whole Life.