What are The Kinds of Life Insurance?

You should always know the kinds of life insurance before deciding to purchase one. Although all of these serve the same purpose – that is to cover your life, the regulations and policies vary from one kind to another. Some kinds of life insurance cover your whole life while others cover only a specified period of your lifetime. There are a few that accumulate value while there are others that don’t.

1. Whole life insurance – this kind of insurance offers you protection for the whole of your lifetime as long as you pay the correct premiums.

2. Universal life insurance – this kind of insurance is based on cash value. The insurance policy stipulates that any premium payments above insurance costs shall be credited to cash value which earns interest.

3. Term life insurance – this kind of insurance is the cheapest life insurance you can avail. It can cover you for a year or so. It is renewable, but you cannot claim the premiums you paid once the contract has expired. This insurance does not build up cash value.

4. Cash value life insurance – this kind of insurance is similar to universal life insurance because it builds up cash value. In this policy, the premiums are higher at the start of the contract. All of the excess premiums that are not used in paying cost of insurance are invested in the company and paid interest.