If you have ever bought life insurance or are now in the market for a policy, the various terms can be confusing. This can make picking the right policy for you even more confusing. A few explanations will make it easier – just what is the difference between Term, Whole Life and Universal life policies?
Term Life Insurance
This policy provides a set amount of coverage for a limited period of time. The consumer decides the amount they wish to carry and for how long. Level term refers to a policy that remains the same throughout the life of the policy. Coverage never increased. In contrast, an Increasing Term policy adds coverage amounts as set by the company, each year of the policy. However, this is generally sold as a rider to a Whole Life policy.
Whole Life Insurance
Whole Life is generally carried throughout life. The policy does not end until the insured’s death. In addition, these policies earn cash value and can be used for any needs the insured might have. Many people keep the cash value until the death of the loved one. This results in a larger payout for those who are beneficiaries.
Universal Life Insurance
This type of coverage functions somewhat like Whole Life in that the policy provides insurance coverage for life in addition to cash value over time. The difference lies in the flexibility of Universal policies.The insured has the option to change the amount of coverage at any time or to increase the amount he is paying in to garner more cash value.
To decide which policy is right for you, contact us today at Need Term Insurance. One of our experts can help you make the right choice.