What Types of Life Insurance Policies are available?


Types-of-life-insuranceTypes of Life Insurance you should learn about…

When it comes to life insurance, there are four common types of life insurance policies: term life insurance, whole life, universal life and variable life. It’s important to understand the different types of insurance in order to understand which one is best for your situation. Each form of insurance has different features, benefits and premiums.

Term life insurance one of  the simplest and least expensive types of life insurance.  Advantages are:
  • Affordable term life insurance quotes can be generated quickly
  • One of the simplest types of life insurance – select the amount of coverage, specified term period for the premium that you can afford.
  • The premium is based on a number of factors including age, sex, health and marital status
  • Premiums are lowest for younger individuals that are non-smokers
  • Premiums remain the same during the term period
  • You can renew your policy or cancel it any time

*Read a great post to learn about Factors That Influence Term Life Insurance Rates.

*Use our detailed Life Insurance Premium Calculator to calculate how much coverage you need.

types of life insurance policies

 Whole Life Insurance

Unlike term life insurance that covers a specific time period, whole life insurance is Guaranteed to remain in force for the life of an individual as long as the premiums are paid on time. The main advantage of these types of life insurance policies are:

  • Premiums are Guaranteed to remain the same for the rest of your life.
  • So, if you obtain whole life insurance when you are young, your. Guaranteed to have the same low insurance premiums for life.
  • Some insurers invest a portion of the premiums and share the income with policyholders in the form of a dividend.  These dividends maybe in addition to the Guaranteed Cash Value of the policy.  However, they are not guaranteed.
  • Whole life insurance is a perfect option for those who want to purchase a life insurance policy that provides both a death benefit, tax deferred build up of cash value.

To see if these whole life types of insurance are right for you read up on the Whole Life Insurance overview post.

Universal Life Insurance

Universal life insurance gives you the flexibility to decide the face amount of coverage and premium commitment.

Universal Life is available in both fixed and variable versions. The key differences are:

  • In the fixed product the cash values accumulate based on the general assets of the company.
  • The variable version allows the client to invest among various stock and bond mutual funds to fund the cash value build up.  This of course increases the risk that the client is taking.

Although a Variable Universal Life Insurance policy enables you to increase the cash value, there is no guaranteed rate of return.  Where as a Fixed Universal Life Insurance policy has a Minimum Guaranteed Interest Rate.

Check out our post, ‘What is Universal Life Insurance and How does it work?’.

Other Types of Life Insurance

Mortgage Life Insurance

This type of life insurance is geared entirely towards repayment mortgage protection. As long as the mortgage life policy is in force, if the policyholder passes away the mortgage would be paid off. This policy is ideal for a borrower worried about paying the remainder of a mortgage amount during the mortgage period.

Buy/Sell or Keyman

Buy/sell arrangements are designed to protect business owners or partners in the event that one of those people passes away. It provides options for what the remaining partners are eligible to do in order to move forward with the business. A keyman policy is also business related, but it’s geared towards providing a life insurance policy to a key employee as a reward.

Disability Insurance

While life insurance is certainly an important component of financial protection, many people often neglect adding disability insurance to their plans as well. In the event that you become disabled (which, according to current statistics, will impact 1 in 4 people), a disability policy will activate after an elimination period to help with a portion of the income you were receiving prior to the accident. Disability insurance can be an important gap-closer for those heavily reliant on their income.

There are several types of life insurance options available to you.  It can be confusing at times so we are here to help.  Feel free to leave us a messaging using the Send Voicemail option at the top of the webpage (computer mic required) and we can email or call you back.  Or call us directly at 1-401-884-4600.

Term Life Insurance Speights Risk ManagementOur family business was established over 40 years ago to help protect families & businesses by providing sound Risk Management strategies. Feel free to call us at 1-401-884-4600, contact us via email or click the Send Voicemail link at the top of the page.

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