Life Insurance types
You are searching for life insurance and you have seen so many different terms and descriptions that you are totally confused. What exactly and the different types of life insurance. It happens with many people and we are going to try and provide some explanations in order that you chose the most effective policy for you and take out some affordable life insurance.
Whole Life Insurance
Whole life insurance provides insurance to cover the life insured for the there whole life, hence the name. This policy is in effect from the date it has been agreed (the policy date) until the insured dies or stops paying the premiums. Wth this type of policy the insurance company know they will pay out at some point, so they know the risk. They have to calculate when the life insured is expected to die in order to calculate the premium to ensure that on average they can cover the amount of cover requested plus make there own profits. These policies are also know as Permanent Life insurance. Depending on the type of policy (there is always variations!), a build up of cash value can occur through an investment element.
Term Life Insurance
Term life Insurance provides life insurance for a fixed period of time, the term. This term can run from 1 year to 30+ years if required and hence it is often used in conjunction with Mortgages or loans. At the end of the term the policy expires of if the insured stops paying the premiums. The insurance company can offer a new policy based on a new term and the age at this point. The premiums would of course be recalculated. This type of policy is seen as the more affordable life insurance option due to the expiry date of the policy being known.
These are the two core life insurance products available. They could be compared as two different shoes. They both fit and wear well. One is more expensive than the other, but it does not expire and hence the premium remains the same and contains a cash build up element. Term Life on the other hand is more affordable and can provide high levels of life insurance without the need for medicals and can offer guaranteed acceptance if that is required. By shopping around significant savings can be made by comparing quotes online.
The are many different flavours of these two core life insurance products. The secret of course is to have some life insurance in place. Whether it is whole life insurance or term life insurance doesn’t matter when you die. The face that you had a policy will make all the difference to your loved ones.