The 6 Common Types of Life Insurance
One type of insurance that many people feel they don’t need is life insurance. Not only is this policy payment for your dependents should anything happen to you, but it’s also something you hope not to have to worry about for a long time. However, holding off on life insurance can be expensive.
Life insurance such as Diabetes life insurance especially if you have Diabetes is important for more people than you might think. Does anyone rely on you financially? Whether it’s children, a spouse, another family member, or even friends or business partners, you want to make sure are covered in the event of your passing. Life insurance can be a way to relieve that uncertainty. When choosing the ideal type of life insurance, there are several types you should know about.
- Term Life Insurance
This is the most common option for life insurance and also the most reasonable price point. These policies cover a certain number of years, and your beneficiaries only get the payout if you pass away during the policy term. These policies also require the least thorough medical examination of any policy.
You must keep up with payments during the term, or the policy lapses and leaves you uncovered. You may be able to renew the policy at the conclusion, but the terms may change. There may also be an opportunity to transfer the policy into a more extensive one. Reviews for Bestow life insurance can give you an idea of how these policies work.
- Whole Life Insurance
Unlike term life insurance, whole life insurance guarantees a payout for your loved ones no matter when you die. You’ll pay ongoing premiums, which are fixed to the term you negotiated. A portion of your premiums goes into a nontaxable cash value account passed on to your beneficiaries.
This is the most basic form of permanent life insurance, allowing you to ensure a safety net for your loved ones without having to renegotiate terms down the line. Should the policy lapse, you may be able to collect some of the cash value account. Be sure to do your research to decide if this plan is right for you.
- Universal Life Insurance
This is a similar policy to whole life insurance and covers your entire life, but it doesn’t come with the fixed premiums of whole life plans. This means that as circumstances change, your policy rates could rise or lower based on the condition of your health. The increased flexibility means you can affect the terms of the policy, but it also means you should pay special attention to what you sign. This policy is rather strict on payment, so you don’t want to miss any payments to avoid coverage interruptions or fees.
- Final Expense Insurance
Suppose you don’t want to commit to an expensive life insurance policy but want to ensure your loved ones don’t incur any hefty bills for your burial. In that case, final expense insurance is a simple solution. This is a limited insurance plan that only covers your burial costs and other associated expenses. It is also easier to get approved for than some other plans.
Funerals can be a huge unexpected expense, so this can be a major relief to loved ones. It offers the lowest premiums of any full-life policy. However, it doesn’t offer any other financial support to the beneficiaries and doesn’t invest any premiums.
- Simplified Issue and Guaranteed Issue Insurance
These two options are ideal for anyone who doesn’t want to go through a medical examination. However, they come with higher premiums and less coverage. Simplified issue insurance is ideal for anyone who needs to obtain life insurance in a hurry with few questions asked and is willing to pay for it.
Guaranteed issue life insurance is similar, but while simplified issue insurance may have some health questions, guaranteed issue is simply pay-to-play. You pay the premiums, and they promise you coverage. These are ideal options for anyone who has been deemed ‘uninsurable’ for other factors.
- Group Life Insurance
While couples can buy joint insurance policies under all these other options, some businesses offer larger options. Bought in bulk, usually with good rates, an employer or other organization usually provides these policies. Some employers may also pay some or all of the coverage costs depending on your contract. These are most often term insurance policies, and some may come with the option to upgrade to whole life at an additional cost.
Cover Your Bases
Which of these life insurance is right for you? That will depend on your needs, budget, and what you intend to leave behind. Whichever one you choose, you’ll be creating a safety net for the people you care for most.