Life insurance can help protect your family and financial obligations. Life insurance can provide a generally tax-free benefit to designated beneficiaries, subject to the policy terms and applicable tax rules. It is also used to cover your mortgage and your personal loans, such as your car loan. Your individual life insurance follows you when you retire and you are no longer insured by your employer.
Once you understand the importance of taking out a life insurance policy, you need to make the right choice. To do this, you need to ask yourself about your needs and purchase a product that works for your family and insurance premiums that fit your budget.
What Are the Main Types of Life Insurance?
Term
Term Insurance is the simplest form of life insurance. It pays if death occurs during the term of the policy, which is usually 5-, 10-, 15-, 20-, 25-, or 30-year terms.
Term life insurance can help cover:
- Mortgage or Rent
- Debts
- Business expenses
- Funeral expenses
- Education Funds
- One to three years of income replacement
Whole life/permanent
Permanent life insurance is a life insurance policy that covers a policyholder as long as he/she lives. In addition to being a life insurance product, it is also a product that may accumulate cash value – a whole life insurance policy accumulates value that you can get, either when you terminate (surrender) the policy or if you decide to borrow against the policy value.
There are two major types of permanent life insurance
- Whole life insurance
- Universal life insurance
Life Insurance Quotation
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