What are the principal types of life insurance?
There are two major types of life insurance-term and whole life. Whole life is sometimes called permanent life insurance, and it encompasses several subcategories, including traditional whole life, universal life, variable life and variable universal life. In 2003, about 6.4 million individual life insurance policies bought were term and about 7.1 million were whole life. Life insurance products for groups are different from life insurance sold to individuals. The information below focuses on life insurance sold to individuals. • Term Life Insurance: Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions. There are two basic types of term life insurance policies-level term and decreasing term. • Level Term: Level Term means that the death benefit stays the same throughout the duration of the policy. In 2003, virtually all (97 percent) of
