Types of Life Insurance Plans
A Insurance Article Contributed by Manoj Kumar
Types of Life Insurance Plans
When you purchase a life insurance policy it helps to know about the different types of life insurance plans available in order to make the right choice depending on your requirement. Life insurance plans are categorized on the basis of the insurance plan duration and the extent of benefits offered. Life insurance plans are broadly classified under three categories as follows:
* Term Life Insurance
* Whole Life Insurance
* Universal Life Insurance
Here is an overview on the different types of life insurance options available in order to help you make an informed decision when you purchase your life insurance coverage.
Features of Term Life Insurance
Term life insurance policies are taken for a specific period of time and provide extensive benefits within the particular period. These policies cost less in terms of premiums when compared to all other types of insurance plans. A term life insurance is taken to provide for temporary insurance needs. One major drawback of this type of insurance is that it does not accumulate cash value.
When you apply for term life insurance, your insurance provider may allow you to combine the policy benefits along with critical illness insurance in the same policy incase you require this additional coverage.
Features of Whole Life Insurance
As the name states, a whole life insurance plan offers insurance coverage for your whole life. The cost of insurance, i.e., the premium amounts on such a life insurance plan remains constant (i.e., does not increase) for the entire plan duration. You may choose to pay premiums on your whole life insurance for a set period of time or for your entire life. By choosing a short payment period you may avail large discounts from your insurance lender.
A whole life insurance can be surrendered at any point of time in the future in case you are unable to make payments. Upon surrendering the policy you will be paid the cash value of the policy (at that particular period) less surrender charges if any.
Features of Universal Life Insurance
This is the most versatile type of life insurance that you can purchase for your beloved ones. A universal life insurance provides permanent insurance coverage for your life with added benefit of increased value over time. The insurance coverage under this type of plan carries flexible options and can be customized to suit any specific requirement that you may have.
One of the best advantages in universal life insurance is that by applying for such insurance scheme you stand to profit from tax-sheltered savings in order to help pay for your policy. Universal life insurance plans are a perfect way to save money for your retirement.
How to Select the Right Type of Life Insurance Plan?
Prior to deciding on your insurance plan it is first essential to clearly identify your requirement. Determine the type and extent of life insurance coverage you require and also the type of benefits you would like to avail from the insurance policy. Then study the features of the different type of coverage options available find out the plan that offers comprehensive coverage depending on your unique requirement. Remember!
It is absolutely essential to go in for a life insurance coverage that you can afford. As a next step check out the different insurance providers and compare different rates offered by competing life insurance companies. It is absolutely essential to opt for an insurance provider of sound reputation.
