When it comes to make choices out of discrete options, it leaves everyone dazed and confused. If you want to select particular type of life insurance out of many options, then it definitely going to coerce you to work out several times. Different types of life insurance are designed for different people and you must consider your future priorities before opting for a particular life insurance policy. Following are the various life insurance types which are customized according to the choice of policyholder-
• Whole life insurance: It is the most expensive of all life insurance types and is also called straight life insurance. The premium amount remains fix in whole life insurance, as it also guarantees death benefit and cash value growth rate. Whole life insurance is perfect for those people who do not only want protection with the policy that remain permanent but also want an investment vehicle that will help in achieving long term financial goal.
• Term life insurance: It is the least expensive form of life insurance which offers affordable coverage with flexible length of term. Term life insurance does not serve any purpose of investment tool as it does not provide facility of cash value growth rate. But after the death of policyholder, his beneficiaries will receive the entire amount of death benefit with tax-free benefit.
• Universal life: It has flexible payment option with adjustable premiums for high flexibility. It has many similarities with ‘whole insurance plan’ and it can help your loved ones at the crucial time of their life. The universal life insurance policy receives cash value which does not go below a certain level. The exact cash value of the policy gets accumulated on the tax-deferred basis. The policy stands appropriate for the people who are seeking guaranteed interest rate and annual adjustable death advantage.
• Survivorship life insurance: It is also called as second to die life insurance and is a kind of coverage that protects two people in a single policy. The survivorship life insurance is much cheaper than two individual policies. This kind of policy removes the heavy burden of estate taxes on heirs; thereby serve the valuable purpose of estate planning.
Select the life insurance type which will match your priorities and make sure that the insurer you choose has license to sell a particular life insurance type in your state. Avoid buying insurance policy from the company without checking its reputation, legitimacy and standing. Don’t hesitate to ask about all the critical nuances involved in a particular insurance type, it will help you evade the future surprises that may come in your way.