Term And Permanent Plans
It is always wise to examine life insurance policies before you buy. There is much to choose from.
There are basically two types of life insurance policies, term life insurance plans and permanent life insurance plans.
Let us take each type apart and see how they would work for you.
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Select Life Insurance Policies
Click on the links for each type of policy for more detailed information.
- Term Life Insurance
What exactly is term life insurance. Term insurance can be described as a policy which provides a death benefit for a specific number of years or specific term. All term policies have level death benefits, they never decrease, except one. The decreasing term policies differ in that the death benefit decreases every year. Take a look at how this term policy works as well as how the others work.
This policy was designed to pay off home mortgages upon the death of the homeowner. the death benefit, therefore, decreases as the balance owed decreases. This is one of the cheapest policies available.
Yearly Renewable Term
The face amount of this policy is level but the premiums increase every year. This can be described as term life insurance in it’s purest form. As you get older the premium increases.
5 Year Term
The 5 year term policy has a level death benefit as well as level premiums.
10 Year Term
This plan cost a little more than the 5 year term buy lasts 5 years longer.
15 Year Term
Used in family situations if you are starting late. Can be used for business continuation or for key employee life insurance.
20 Year Term
This is a favorite of many people. It can be used to protect the family or to fund a buy sell agreement. It can also be used for key man insurance.
25 Year Term
Can be used in a similar manner as the 15 year term or the 20 year term.
30 Year Term
This is again similar to the 3 policies immediately preceding but it give you a little more time; especially good if you want to have some protection even after the children have graduated college and are on their own. You want to provide some additional cash for your spouses security.
- Permanent Life Insurance
These policies last longer than term policies. They are permanent life insurance policies. They have a level death benefit. Some last up to age 100.
Universal Life Insurance
This policy provides level life insurance but includes a savings element. In some cases lasts up until age 100. It is term based.
Variable Universal Life
Based on permanent but includes an investment. A special license is required to market this policy.
Variable Life Insurance
Variable life also includes investments but is based on whole life insurance.
Whole Life Insurance
This plan has a level death benefit for the rest of your life even if you live until age 100.
If you were to get illustrations on all the life insurance policies you would notice that the longer the duration the higher the premium.
The older you get the more life insurance costs. A 10 year term would cost more than a 5 year term policy. Whole life would cost even more because it lasts until age 100.
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