There are five different kinds of basic life insurance policies for you to consider. The different types of life insurance can have extra benefits at additional premium. To give you an idea of the basics, below is a list of the different types and what they are:
Term Life Insurance – The Term of the policy refers to how many years it is active for which is usually around 25. If you die in this time your beneficiary receives a lump sum death benefit. If you do not, the policy ends with no payments and you will have to renew your policy.
Whole Life Insurance – This policy covers you from inception to death and premiums are usually slightly higher than term insurance. The difference is collected as a cash value and this is then invested on your behalf. Universal Life Insurance – Like whole life insurance except you are allowed flexibility in your premium payments. Variable Life Insurance - Like whole life insurance except you are allowed to choose the type of investments your cash value goes into.
Variable Universal Life (VUL) Insurance – Like whole life insurance with the benefit of flexibility in your premium payments and you can choose your investments.