Types of Life Insurance Policies
Good wealth management is the result of consistent evaluation of your financial goals and objectives, as well as using effective methods to accomplish them. Though often ignored as a planning tool, life insurance can offer several benefits to policyholders, whether individuals, families, or businesses or organizations.
View site for the most popular types of life insurance policies for your choosing:
Term and Permanent Life Insurance
Generally, the cheapest short-term insurance option is term insurance, but you may run out of coverage or it can become cost-prohibitive unless used prior to the end of its term. On the other hand, permanent life insurance requires higher monthly premiums but comes with a death benefit, irrespective of when you die, plus other benefits, like tax-deferred investing, flexible premiums, etc. Universal Life Insurance
The best advantage of UL policies is flexibility. For starters, you can decrease your death benefit and vary your premiums. It comes with a cash value as well, or paid premiums in excess of the current cost of the coverage. The cash value balance will even earn an insurer-set interest rate, which is proportional to the yield of the general account and is then invested in top-quality corporate bonds. After a while, you can borrow against a portion of your cash value or just withdraw some of it, while keeping your guaranteed death benefit as is.
No-Lapse Guaranteed Universal Life Insurance
As long as you pay your premiums on time, your death benefit under a GUL policy is guaranteed. These policies are cheaper since your premiums are calculated to maintain a consistent payment until you die.
Indexed Universal Life Insurance
IUL policies almost identical to UL policies, except a broad market index dictates the prevailing cash value interest rate, which is subject to an insurer-determined minimum and maximum rate of return. Since these policies have a cash value balance with a higher return rate, their premiums are often lower than traditional UL policies having the same death benefit.
Variable Universal Life Insurance
VUL, UL and IUL policies have many similarities but with VUL, the cash value is automatically put into investments like mutual funds, which then determine the rate of return that the balance will earn. You also have the freedom to select your own investments but with a considerably higher performance risk. For more info about life insurance, click here.
Whole Life Insurance
WL policies let you pay consistent premiums throughout their life and guarantee cash value accumulation. Upon maturity, your cash value will equal your death benefit. You may also borrow against your accumulated cash value in a WL policy, just like UL insurance. The crucial difference is that WL policies are less flexible compared to UL policies when it comes to premium, cash value and other features.