Life Insurance Planning
Yearly Renewal Term Insurance
5 Year Renewal Term Insurance
10 Year Renewal Term Insurance
15 Year Renewal Term Insurance
20 Year Renewal Term Insurance
30 Year Renewal Term Insurance
This is the simplest form of life insurance. In fact, these provide protection for a specified period. In fact, it provides protection for a specified period and doesn’t accumulate a cash value.
Also, the premiums are fixed over the life of the cover. Hence, term insurance cover only provides against death. So the policy will pay if death occurs during the term of the policy. The term ranges from 1 to 30 years.
There are 2 types of term life insurance covers. These are level term and decreasing term. Further, in level term the death benefit is the same duration of the policy. In decreasing term insurance, the death benefit drops over the duration of the policy.
Whole Life Insurance
Guaranteed/Universal Life Insurance
Index Universal Life Insurance
Unlike term insurances, these policies remain active until they mature. Yet, they can lapse due lack of premium payments. These insurances offer the benefits of term policies and also allow growth of capital.
The insurer can only cancel these policies in the event of a fraudulent application. This too must be within a period defined by law. So, Permanent or Whole life policies pay the death benefit whenever the insured dies. Hence, there is no fixed term.
There are 3 main types of permanent or whole life policies. These are universal life insurance, traditional whole life, variable life and variable universal insurance. Furthermore, there are variations within each type.
Variable life insurance is a form of permanent life insurance that provides a death benefit and has an investment component.
It allows policyholders to invest their cash value in different investment sub-accounts, such as stocks and bonds.
The performance of these investments determines the cash value of the policy. Premiums are flexible and can be adjusted to meet the policyholder’s needs.
The death benefit also can be adjusted depending on the performance of the investments.
With variable life insurance, policyholders have the opportunity to grow their cash value through their investments.