What are the different types of life insurance? The answer is at once simple and complicated, so we'll keep it simple and leave the complicated information about life insurance types to the links you see on this web page.
Let's get right to it, then! The first type of life insurance is term life, which is pure insurance: if you die, your beneficiaries get the money specified by the policy; if you are alive when the policy expires, you don't see a penny of it. There is no possibility of investment to mitigate your losses. You'll pay lower rates, though, for term life insurance, since the coverage tends to be less and because the term is fixed.
Cash value life insurance, on the other hand, has a certain cash amount you can withdraw while still alive. If you are willing and able to pay for a greater amount of life insurance, think about which tax bracket you fall under, how long you really need insurance for, and how high of a return rate you could get if you invested the money elsewhere.
Whole life and universal life are two types of cash value insurance. Whole life is a permanent policy that covers you as long as you live, but costs more than term coverage. Universal life coverage mixes the benefits of whole and term life insurance by allowing you to adjust your rates periodically and pay premiums more flexibly.
Look through our website for more information about the different types of life coverage.