Many people are not aware of the different types of life insurance what type of policies will meet their needs in the best manner. Given the variety of financial products available, it has become quite difficult to choose the best option.
- It is not just enough to choose the board or department of insurance when selecting the right policy. There are different aspects to take into account. Nevertheless, there is no one ideal ‘best’ life insurance policy since each plan is meant to cater different preferences. Here are some types of life insurance that can be taken into account.
Term Life Insurance
Death benefit protection is provided by term life insurance for a particular period of time. The insurance policy is renewed on a yearly basis once the term expires. The owner of the policy is allowed to typically renew until the age of 95. However, the renewal may cost an increased premium.
It is one of the most renowned policy and is affordable as well. Most financial planners recommend this policy due to its flexibility.
Whole Life Insurance
Death benefit protection is provided for the entire life with whole life insurance. It offers guaranteed fixed premiums and protection until death. However, this type of insurance is costly compared to other policies.
It is an ideal financial product for retirement planning. It enables the owner to borrow against the cash in policy but it may not prove to be a good financial decision. It reduces the cash value in policy and the insurance company charges interest as well.
Variable Universal Life Insurance
The face value is fluctuated in variable universal life insurance depending on the value of a dollar and other equity products that support the policy at the time payment is due. It is an ideal financial product when the market is at its boom and the protection can offer a great bonus. But when the market trends are low, this may be detrimental in monetary terms. It can be a good option as an addition but must not be considered as the first choice.
Accidental Death Insurance
Accidental death insurance is a policy that benefits the beneficiary if the cause of death is an accident. The policy only covers accidental death. It may not cover illnesses, suicide or other reckless activities leading to death. Natural deaths are not normally covered by this policy. It is a good option for all applicants who do not qualify for other policies.
Simplified Issue Life Insurance
This policy refers to the notion of quickly issuing a policy due to less underwriting. It doesn’t entail a medical exam but does consist of health-related questions to make relevant assessments.
It is an ideal option for someone who doesn’t want to undergo a medical exam due to whatever reasons. It may be a great choice for all those applicants who believe they have a health issue but the doctor has not yet confirmed it. Sometimes it is better to undertake this policy rather than getting denied on fully underwritten policy.