Types of Life Insurance Policies
Life insurance policies are financial products designed to provide a death benefit to beneficiaries upon the policyholder’s death. These policies help protect loved ones from financial hardship. ISU – Bright Agency provides life insurance in Madison, Seymour, North Vernon, Columbus, Greensburg, Versailles, IN, and surrounding areas.
There are several main types of life insurance available in the market:
Term Life Insurance
Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. It is the simplest and most affordable type of life insurance. If the policyholder passes away during the term, the beneficiaries receive a death benefit. However, if the policyholder survives the term, there is no payout. Term life insurance is ideal for individuals seeking coverage for a limited time, such as until their mortgage is paid off or children become financially independent.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance that provides coverage for the policyholder’s entire life, as long as premiums are paid. It includes a cash value component that grows over time, typically at a guaranteed rate. Policyholders can borrow against the cash value or surrender the policy for its cash value. Whole life insurance offers stability but tends to have higher premiums compared to term insurance.
Universal Life Insurance
Universal life insurance is a flexible permanent life insurance policy. It offers lifetime coverage along with a cash value component. Unlike whole life insurance, universal life policies allow policyholders to adjust premium payments and the death benefit within certain limits. The cash value earns interest based on current market rates or a minimum guaranteed rate, offering some flexibility in planning.
Variable Life Insurance
Variable life insurance is another form of permanent insurance with an investment component. Policyholders can allocate a portion of premiums into various investment options like stocks and bonds. The cash value and death benefit may fluctuate depending on investment performance, offering potential for higher returns but also carrying investment risk.
Each policy type serves different financial needs and risk appetites, making it important to assess personal goals when selecting life insurance. Would you like to discuss? Contact us a call, or email us!