types of life insurance plans

Buying life insurance can help protect your loved ones from the financial impact of your death. But which type of plan is right for you?

There are three main types of life insurance plans: term, whole life, and universal life. Knowing the pros and cons of each can help you choose the right one for your needs.


Term life insurance is an affordable option that provides temporary coverage for a specific period. This type of policy typically lasts between 10 and 30 years, but longer terms are available from some insurers. It is a good choice for young couples or individuals with temporary financial needs who want protection for a set period of time.

It’s also a good idea to get quotes before purchasing a term policy, as the cost of premiums can vary depending on your age and health. If you have serious medical problems or are a smoker, you may not be eligible for this type of coverage.

The best term life insurance is usually a level term policy, which means you pay the same premium for the entire term. The insurance company will pay out a death benefit if you die during that time frame, and it is tax-free (unless the premiums are paid using pre-tax dollars).

You can also buy term life insurance through a group plan from your employer or an association. This is a good option for employees who want to protect their families in case of a death, or owners of businesses with valuable key employees who need coverage.

Many group term policies are renewable, so they can be renewed at a higher rate each year after the initial term has run out. However, there are some exceptions to this rule, such as if the insured has died suddenly or if they’ve been diagnosed with cancer or another severe illness that would make it difficult to renew the policy.

Buying life insurance is something that everyone should do, but the right plan can be hard to find. Luckily, you can quickly and easily compare term life insurance rates online.

Most term life policies are available in 10-year, 15-year, 20-year or 30-year lengths, and most offer renewable coverage for each year of the policy. You can also add child riders or waiver of premium riders to these policies.

Term life insurance is the most affordable form of life insurance, but it can be a poor choice for those with serious health issues or if they’re unable to afford to continue paying their premiums. It doesn’t build cash value like a whole life policy does, and it has no surrender amount if you cancel the policy. It is also more expensive to renew than permanent life insurance.

Whole Life

A whole life insurance policy is a permanent type of coverage that can be used for many purposes, such as providing a death benefit to beneficiaries. It also can be a way to build cash value that can help you with other financial goals.

A part of each premium payment is deposited in the policy’s cash value account. This money grows tax-deferred, just like a retirement or investment account. It can be accessed with a loan, withdrawal or surrender of the policy.

This tax-deferred account can be a useful tool for planning for retirement and other financial needs. However, keep in mind that the cash value portion of the policy may be taxable when you withdraw it, so it’s important to consider your options before making any decisions.

If you’re unsure if whole life is right for you, talk with an agent to help you determine your needs and goals. They’ll be able to explain the different types of policies and answer any questions you might have about how it works.

Some companies offer whole life policies with payment periods of 10 or 20 years, which can reduce your premiums. This is a good option for people who have a limited amount of money to invest and don’t want to make payments forever.

You can also choose a policy that pays dividends, which can increase the value of your cash value and death benefit over time. This is especially beneficial if your policy pays dividends in addition to a guaranteed interest rate.

When purchasing a whole life insurance policy, you should be sure to choose a company with a strong financial rating. There are reliable sources for financial strength ratings, such as A.M. Best, Moody’s and Standard & Poor’s.

Another factor to consider is the company’s ability to pay out your death benefit if you pass away. A good company will have an adequate reserve fund to pay your claim, as well as a financial plan in place for your family to continue to receive their benefits after you’re gone.

Buying a life insurance policy is one of the most important purchases you can make for yourself or your family. It’s important to get the right policy that will help you meet your goals.

Universal Life

A universal life insurance plan is a type of permanent life policy that offers flexibility in premium payments. You can make adjustments to the amount and frequency of your payments, which may appeal to those with fluctuating incomes or financial needs. However, universal life policies can have lapse risks, so you should talk with a financial professional before making any significant changes to your policy.

Many people choose universal life to protect their families financially as they age. For example, a stay-at-home parent might need the death benefit to cover funeral expenses and other costs, such as child care.

Alternatively, a business owner might use a universal life policy to cover its employees and other expenses. The cash value of the policy could help pay premiums and build up enough to replace lost revenue if the business owner died prematurely.

There are several types of universal life policies, each with its own set of pros and cons. These include guaranteed universal life, indexed universal life and variable universal life.

Guaranteed Universal Life

Unlike other universal life plans, this type of policy doesn’t adjust based on market performance. This means that your premiums won’t go up or down, but they can still increase in value as the stock market rises and falls.

This is a good option for someone who wants to keep their cost of premiums low, but wants to be able to invest their money. This can also be an option for business owners who want to grow their company’s wealth with the potential to earn higher returns on their investment.

Indexed Universal Life

This type of universal life policy is a popular choice for investors because it can help to boost your income over time. It allows you to diversify your investments with different types of securities, which can improve your chances of generating gains.

Unfortunately, a recent warning from the Center for Economic Justice said that this type of policy should be avoided because it’s prone to misleading and deceptive sales practices. It’s also difficult to track your portfolio, so you can’t be sure that you’re getting a fair price for the money you’re investing.

Burial Insurance

Burial insurance is an affordable policy that helps cover funeral expenses when you pass away. The money can also be used to pay off any debts you may have.

The cost of a funeral can be substantial, especially for those who don’t have much savings or other financial arrangements in place. This can cause stress for loved ones who are left to deal with the death of a family member or close friend.

There are two primary types of burial insurance policies: final expense and preneed. These two types of life insurance are designed to help people avoid high funeral and cremation costs and allow them to make arrangements ahead of time for these expenses.

Final expense insurance, often called burial insurance, is a small permanent life policy that pays out a death benefit, usually between $5,000 and $25,000, to your beneficiaries upon your passing. The amount of your death benefit depends on the policy you choose, as well as your age and health.

You can get a burial life insurance policy from companies such as Prosperity and Americo, which both offer instant coverage. The application is simple and takes only 15 minutes to complete, and approvals are quick and easy if you answer the few health questions correctly.

Another option for getting burial insurance is Liberty Bankers Life, which offers a very low premium and has a very quick, no-waiting-period application process. This policy can be especially helpful for seniors with COPD and other serious medical conditions who want immediate coverage.

Many senior citizens, especially those who are in poor health, don’t have enough savings to cover funeral and cremation costs. Burial insurance can be a great solution for these individuals who have limited financial resources and need to ensure that their survivors will have access to money should something happen to them.

Whether you’re considering burial insurance or a different type of life insurance, it’s important to understand the pros and cons of each before making your decision. It’s also wise to consider the reasons why you need insurance in the first place, and to determine which type of life insurance will best meet your needs.