|
|
| Various Types of Life Insurance |
 |
|
|
There are two primary categories of life insurance: term and permanent. However, there are several different types within each category. Listed below are only the most common types. Consult your Life Insurance Professional for a more detailed description of the various types of life insurance and how they may apply to your specific situation.
Term Insurance - Life insurance under which the benefit is payable only if the insured dies during a specified period. Listed below are various types of term insurance.
- Level Term - a fixed amount of coverage with premiums that are fixed over a certain period of time, usually in 10-year increments.
- Increasing/Decreasing Term - amount of coverage increases or decreases throughout the term, premiums remain level.
- Renewable Term - includes a renewal provision that gives the policyowner the right to renew the insurance coverage at the end of the specified term without submitting evidence of insurability.
- Convertible Term - Gives the policyholder the right to convert the term policy to a permanent policy.
- Group Term - insurance purchased typically by an employer or professional association that is intended to cover several people, usually resulting in reduced premiums.
Permanent Insurance - Life insurance that provides coverage throughout the insured's lifetime and may include an element that builds a cash value.
- Traditional Whole Life - remains in force during the insured's entire lifetime, provided premiums are paid as specified in the policy. Whole life insurance may also include an element for accumulating growth (called the cash value).
- Universal life insurance - characterized by its flexible premiums, flexible face amounts, and unbundled pricing factors.
- Variable life insurance - a form of whole life insurance under which the death benefit and the cash value of the policy fluctuate according to the investment performance of a separate account fund. Most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum.
- Variable universal life insurance - a form of whole life insurance that combines the premium and death benefit flexibility of universal life insurance with the investment flexibility and risk of variable life insurance. Also called flexible premium variable life insurance and universal life II. See also investment-sensitive insurance.
- Last survivor life insurance (also known as "Survivor Life")- whole life insurance that covers two persons and provides for payment of the proceeds when both insureds have died. It is generally designed to pay estate taxes. Also known as second-to-die life insurance.
- Single-premium whole life insurance - whole life insurance purchased with a single, lump-sum premium.
The concepts contained herein are not intended to serve as advice and may have legal, tax and accounting implications. Consult your Attorney and CPA for advice.
|
|
|
|