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Kinds of Life Insurance: Which One is for You?

If you are planning to buy life insurance, you want to be familiar with the options you have. Understanding a little about this type of insurance can help you make an educated decision about which coverage is right for you and your family. Learn which is the best type of life insurance policy for you at Affordable Life USA.

 Life insurance has two kinds. The first one is meant to help meet your temporary needs and the other to meet your permanent needs. Below are explanations of these kinds of insurance:

Term Insurance

This kind of insurance gets you covered within a specific period or term. This cost-effective plan has some flexibility t adjust to your long-term goals. Over the years, it is likely for your needs to change. Term life insurance can offer options to extend your coverage period or switch to a permanent life insurance plan.

With term life insurance, you just pay for basic death benefit coverage. That is why your insurance costs are reduced for the length of your term. This kind of insurance lets you choose from terms such as five years, ten years, fifteen years, or twenty years. You will pay the same amount of premiums for the term. However, premiums can increase after the term expires.

Permanent Life Insurance

This kind of insurance lets you insure against the unexpected while increasing your investment’s value over time. With this insurance, you can pick a plan which gradually reduces insurance coverage to maximize the investment potential of your policy. Here are the different kinds of permanent insurance:

  • Whole life insurance. With this insurance, your premiums are fixed while the policy is in place. Over time, as you pay your premiums, your policy builds up a cash value and dividends. You can use such dividends for lowering premiums, buying more insurance, or paying for term insurance.
  • Universal life insurance. This insurance provides you with more control over the way your policy is structured. You can choose the kind of insurance and investment options. This insurance usually provides a guaranteed return on cash value.  Your premiums may increase, reduce, or get deferred and you can withdraw your cash values.

In order to understand the face value of a life insurance policy that your family needs when you pass away, add up your living expenses, children’s education, mortgage, and other debts. Your term’s length may depend on your kids’ age and when they may complete college. But, if you are already 60 years old and considering buying a policy, you might want a small term life insurance which could cover your final expenses or a whole life policy which could provide for the needs of your spouse.

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