What’s the difference between a life insurance policy and an annuity? How about between whole and term life insurance? If you don’t know, you’re not alone. Many people have no idea what the different life insurance policies are. In this blog post, Powerhouse Insurance will explain the differences so that everyone can understand. Whether you may be young or old, single or married, read on to find out about the various kinds of life insurance policies in store for you.
Term Life Insurance
Term life insurance is the most popular type of policy, and for a good reason. It provides coverage for a specific time, usually 20 to 30 years, and is affordable. If you die during that time frame, your beneficiaries will receive a death benefit. On the other hand, if you don’t die during that time frame, the policy expires, and you (or your beneficiaries) get nothing.
Whole Life Insurance
It is a type of permanent coverage, which means it lasts your entire lifetime as long as you continue to pay the premiums. Whole life insurance has two main components: the death benefit and the cash value. The death benefit is paid to your beneficiaries when you die. The cash value component is a savings account that grows over time. You can borrow against it or cash it out if you need to, but it will reduce the death benefit that your beneficiaries will receive.
Permanent Life Insurance.
Permanent life insurance lasts your entire lifetime as long as you continue to pay the premiums. Permanent life insurance has two main components: the death benefit and the cash value. The death benefit is paid to your beneficiaries when you die, like term life insurance. The cash value component is like a savings account that grows over time. You can borrow against it or cash it out if you need to, but keep in mind that doing so will reduce the death benefit that your beneficiaries will receive.
Which Policy must You Choose?
There are several permanent life insurance policies to choose from, including whole life, universal life, and variable universal life. Whole life insurance happens to be the simplest type of permanent coverage. It has level premiums, meaning that your monthly payments will stay the same for the policy duration. The death benefit and cash value also remain fixed. Universal life insurance is similar to whole life, but it gives you more flexibility in using your premiums. With universal life, you can choose to increase or decrease your premium payments, as well as your death benefit. Variable universal life is the most complex type of permanent coverage. It offers a death benefit and cash value that can fluctuate based on the performance of the underlying investments.
When shopping for life insurance, it’s essential to understand the different types of coverage so that you can select the best policy for your needs. Term life insurance is the most popular type of life insurance, but it only lasts for a specific time. Whole life insurance is one popular permanent coverage, but it can be expensive. Universal life insurance offers more flexibility than whole life insurance, but it can be complex.
If you can’t choose which type of life insurance in Converse, TX is suitable for you, talk to us at Powerhouse Insurance. We can help you understand the types of coverage and choose the best policy for your needs.