Before getting Life insurance quotes some consumers don't understand that life insurance comes in several forms. Although the death benefit amounts may be similar, the structure, costs and duration differ among many other factors. Below is are the main types of life insurance quotes you'll see her on our site. This is to assist you in making a more informed decision. You can see additional tips to save money on life insurance as well.
Whole Life Insurance Quotes
Whole life insurance also referred to as permanent coverage is by far the most common type of life insurance. As the name suggests, this type offers protection for the entire life of the insured i.e. the ''whole'' life. Whole life policies have a cash value component which grows tax deferred at a specific amount (a contractually guaranteed amount) until the insurance contract is surrendered. Whole life policies also attracts level premiums. The death benefit is usually predetermined and guaranteed for the lifetime of the insured.
Premium payments are usually divided into three i.e. one portion goes towards the insurance, the other goes towards administrative expenses and the last portion is channeled into investments. These portions can vary percentage-wise depending on factors like; the insurance company, policy duration etc. Any interest accumulated through investments is usually tax-free. This however varies depending on the policy document.
Term life insurance Quotes
This is another common type of life insurance. This type of life insurance is meant to protect the beneficiaries of the insured against financial losses resulting from the death of the insured. Term life insurance policies pay the amount stated on the policy document. The insurance however provides protection for a specified time period also stated on the policy document. Term life insurance policies don’t build cash values. They also have a maximum term period which is usually 30 years. If you have gathered quotes from companies such as AARP life insurance you can shop to ensure you're getting the best deal. Term life policies are suitable when a person wants protection for a limited time period. The policies are also suitable when a person has limited cash for coverage. Premiums for term life insurance policies are usually lower than premiums for whole life insurance policies.
Universal Life Insurance Quotes
Also known as adjustable life or flexible premium insurance, universal life insurance is simply a whole life insurance variation. Like whole life insurance, universal life is a permanent insurance policy offering cash value benefits. The most distinguishing factor about universal life insurance is based on the fact that the cash, premiums and protection amount are adjustable upwards or downward during the term of the contract as the needs of the insured change. Also, cash values earn interest which is set periodically by the insurer with a guarantee that the interest rate won’t drop below a specified level.
Variable Life Insurance Quotes
Variable life insurance combines traditional protection and whole life insurance saving features with the growth prospective of investment funds. Variable life insurance has two main distinctive features namely; the general and separate accounts. The general account acts as the liability or reserve account of the insurer. The separate account is comprised of several investment funds in the insurer’s portfolio i.e. the money market, equity and/or bond fund. This underlying investment feature makes the death and cash benefit to fluctuate over time hence the name; variable life insurance.
Variable Universal Life Insurance Quotes
As the name suggests, variable universal life insurance is a combination of universal and variable life insurance types. This type of life insurance gives unmatched flexibility i.e. the insured can adjust death benefits and premiums as well as the investment choices. It is however important to note that the policy holder bears all the underlying investment risks. The death benefit usually fluctuates depending on the performance of underlying investments. Variable universal life insurance policies however come with a guarantee that the minimum death benefit will be paid in case the insured dies.
The above information summarizes the main types of life insurance. Although there is more to life insurance policies than what is discussed above, the information is adequate enough to guide you on the right path when you are looking for a suitable life insurance cover.
Feel free to contact us now to get a free life insurance quote. We offer multiple life insurance quotes to increase the customer’s chances of saving money.