Types of Life Insurance

Types of Life Insurance

Opting to buy life insurance, but can’t decide which type of Life Insurance you should get? Don’t worry, we are here to explain everything you need to know about the following types of life insurance:

Term Life Insurance

Term life insurance covers a specified length of time, ranging between five to 30 years as long as monthly premiums are paid. Coverage amounts vary depending on the policy.

Pros: It’s the most affordable way to buy life insurance

Cons: If you outlive your policy, you will need to buy more if you want to continue to have life insurance.

Whole Life Insurance

A form of permanent insurance that pays out benefits upon death regardless of the plan holder’s age. The regular premium payments can be accrued into a fund, which pays out cash dividends that can be used while you are still alive.

Pros: It covers you for your entire life and builds cash value.

Cons: It’s typically more expensive than term life or other permanent policies.

Variable Life Insurance

This is a combination of life insurance and investment, giving plan holders various investment options depending on their preference. The term “variable” refers to the possible change in investment values, making premium payments more flexible.

Pros: There is potential for considerable gains if your investment choices do well. You can take partial withdrawals from the cash value or borrow against it, sometimes tax-free!

Cons: It requires you to be hands-on in managing your policy as the cash value can change daily based on the market. Fees and administrative charges are deducted from your payment before going toward the cash value, it is a riskier choice.

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