What Are The Different Types Of Life Insurance Policies?
The following are different types of life insurance policies and their characteristics. Keep in mind that the intent of life insurance is to provide for the life of your heirs and/or beneficiaries for such things as payment of debts and to provide family income. In addition, the policy can provide supplemental income for retirement. Term Life: • Low initial premium. • May be renewable and convertible to whole life insurance. • Protection for a specified period. • Premium increases with each new term. • Typically no cash value. • Low initial premium. • May be renewable and convertible to whole life insurance. Traditional Whole Life: • Permanent protection. • Fixed premium. • Fixed cash value. • Fixed death benefit. • You can defer taxes on the earnings generated by the policy until you withdraw cash, take out a loan policy, or receive annual interest earnings on dividends. Universal Life: • Flexible premium. • Flexible death benefit. • Cash value reflects premiums paid and current inter
