Types of Life Insurance
There are three main types of life insurance:
Term Life Insurance
Provides coverage for a specific period of time (the “term”), typically ranging from 10 to 30 years.
Index Universal Life (IUL)
Index Universal Life (IUL) is a type of permanent life insurance policy that combines the death benefit protection ….
Term Life Insurance
- Provides coverage for a specific period of time (the "term"), typically ranging from 10 to 30 years.
- If the policyholder dies during the term, the death benefit is paid to the beneficiaries.
- If the policyholder does not die during the term, the policy expires and no death benefit is paid.
Permanent Life Insurance
- Provides coverage for the entire lifetime of the policyholder.
- This type of insurance includes:
Universal life
Variable life insurance
- These policies typically have a savings or investment component, and the policyholder can accumulate cash value over time.
- The death benefit is paid to the beneficiaries whenever the policyholder dies, regardless of when it occurs.
In addition there’s
Final Expense Life Insurance
Final expense life insurance, also known as burial insurance, is a type of life insurance designed to cover end-of-life expenses such as:
Funeral costs
Outstanding medical bills
Other final expenses
- It is usually a type of whole life insurance policy with a smaller death benefit, typically between $5,000 and $25,000
- It is often sold to older individuals or those with pre-existing health conditions who may have difficulty qualifying for traditional life insurance.
- The coverage is generally guaranteed and does not require a medical exam for approval.
- The premium payments are often level, meaning they stay the same throughout the policy, and the policy does not have cash value.
This type of insurance is a way for individuals to ensure that their loved ones will not have to bear the financial burden of their end-of-life expenses, and can provide peace of mind for both the policyholder and their family.
Index Universal Life (IUL)
Index Universal Life (IUL) is a type of permanent life insurance policy that combines the death benefit protection of traditional universal life insurance with the potential for cash value growth based on the performance of an external stock market index, such as the S&P 500.
The cash value of the policy can increase or decrease based on the performance of the index, but there is generally a cap on the amount of growth that can be achieved and the policyholder may also be subject to participation rates, spreads, or other limitations on the index performance that affects the cash value.
Policyholders can also make premium payments and access the cash value through loans or withdrawals, subject to policy terms and conditions.