Life Insurance Coverage Options

Life insurance coverage is intended to give your family the same level of financial comfort they enjoy now even after you die. A life insurance policy can help your dependents pay off the mortgage, send your children to college, and pay for your funeral and burial costs. Life insurance coverage options abound, with term, whole, universal, and variable life insurance policies available. In what follows, we'll explain the various types of policies available.

• Whole life - fundamentally, there are two basic life insurance coverage options: permanent and term life. Of the permanent life insurance policies, whole life is the simplest form of coverage. Policyholders enjoy lifelong insurance protection, guaranteed consistent premiums, a death benefit, and a cash value option. A cash value option means your policy will build value over time that will augment the specified death benefit. It also means that you can borrow or withdraw from the cash value portion of your policy whenever you like.
• Variable life - another one of the permanent life insurance coverage options is variable life, which offers many investment opportunities and flexible terms. The most unique feature of variable life insurance policies is that they allow the insured to adjust, to an extent, the policy's death benefit as well as the size and timing of the premiums. In other words, you can choose, within limits, how much you want to pay on your policy and how large of a death benefit you need at any given time. Moreover, you can invest a part of your premiums in fund options that are professionaly managed.
• Universal life - also a form of permanent life insurance coverage, universal life can offer inexpensive, guaranteed protection with optimal flexibility. With universal life insurance policies, you have the ability to change your premiums and death benefit within limits. You can also choose to grow the policy's cash value or pay cheaper premiums in order to concentrate on your guaranteed death benefit. Remember that with universal life, you will have to pay higher premiums if the cash value growth of your policy is less than expected. Your policy's cash value will grow according to periodically adjusted fixed interest rates. If these rates drop, your premiums will increase to compensate for the difference.
• Term life - term life is the only one of the life insurance coverage options that does not offer permanent protection. Term life allows you to buy a relatively large amount of life insurance coverage that lasts for a specified period, such as 10, 15, or 25 years. Once the policy expires, you have the option to renew, but your premiums will increase as you age.
• Convertible Life Insurance - convertible life insurance will give you the option of converting your term life policy into a permanent life policy if you anticipate needing to change your coverage in the future. Having this coverage will prevent you from being charged higher premiums when you change policies.