You may not want to think about it, but tragedy can strike at any moment. If you have people depending on you, what happens if you suddenly pass away?
This is where life insurance can help. The legally binding process makes sure your designated beneficiaries get financial support if you pass away.
Yet, only 54% of Americans have this coverage. So, you wouldn’t be alone if you were confused about where to start.
Below is a guide about what you should know about the different types of life insurance.
Types of Life Insurance: Perm Vs. Term
Generally speaking, there are two broad categories to understand about life insurance. Understanding the difference between these two can help you differentiate between a smart insurance policy for you.
Term life insurance lasts for a set amount of time. Usually, it lasts about 10 to 30 years. It then expires after your term is up and you won’t have coverage.
Term life insurance usually comes with lower premiums.
Permanent life insurance (or whole life insurance) stays active for your entire life. However, premiums can be costly.
Which type is best for you depends. For example, if you know your beneficiaries will be stable far in the future, you may consider term life insurance. However, if you want peace of mind with permanent family protection, you may consider perm life insurance.
Within this broad structure, there are a few specific examples of different types of life insurance.
Universal Life Insurance
If you want to experiment even more with a permanent life insurance plan, universal life insurance could be for you. You can be flexible with premiums and rework the death benefit amount.
The varieties of universal life insurance are endless. Buying life insurance in consultation with a professional can help you find a good plan if you are intrigued.
Variable Life Insurance
Variable life insurance is a type of permanent coverage that offers a cash value. If you want to experiment with infinite banking and control your flow of cash assets, this could be a possibility for you.
Just know the risks involved with this type of life insurance. If you don’t invest wisely, your death benefit could suffer.
If you are worried about burdening your family’s personal finances with a mortgage after you pass away, consider this type of insurance. Instead of going to a beneficiary, the lender gets your death benefit.
On the downside, it doesn’t offer a lot of financial flexibility for your beneficiaries.
Consider Buying Life Insurance That Is Best For You
These were just a sampling of the different types of life insurance that are out there right now. There could be other types of life insurance coverage that work well for you.
Consider researching more about different life insurance plans on our site. Or, talk to a professional about your desires when it comes to coverage.