Life Insurance Tradeoffs
Term Life Quotes > Types of Life Insurance
Term Life Insurance & Whole Life InsuranceThere are two main categories into which individual life insurance policies fall: term life and whole life. According to the Insurance Information Institute, about 47% of the individual life insurance policies bought during 2003 were term life insurance policies, and 53% were whole life insurance policies.
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Term life insurance policies are the simplest. They last for a specified term (from one year to 30 years, or to a specified age) and pay out a death benefit only if you die within that term. The most common type of term life insurance policy is level term, but decreasing term policies are also available, along with a newer return-of-premium term life insurance policy.
The advantages of term life insurance (versus whole life insurance) include:
Whole life insurance is more complex than term life insurance; there are more policy coverage variations within the whole life category. Whole life policies last your whole life, paying out a death benefit whether you die at 25 or 125. They also include a savings element, making part of your premiums available to take out as cash value. In addition to traditional whole life insurance, universal (adjustable) life insurance and variable life insurance policies are also available.
The advantages of whole life insurance (versus term life insurance) include:
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Types of Life Insurance