Different Types Of Life Insurance

Life insurance gives protection and financial security after a person’s death. Primarily there are two categories of life insurance:

• Term life insurance
• Permanent life insurance

There are several different types of insurance within each category.
1. Term Insurance: In this category of life insurance, the death benefit is payable only if the insured person dies under specific time period of insurance policy. The various types of term insurance are:

• Level term: A level term means the fixed amount of coverage with premiums. The amount should be fixed in a certain period of time.
• Increasing or decreasing term: The amount of coverage increases or decreases over a specific period of term. But the premium of insurance remains at one level.
• Renewable Term: The policy owners have the right to renew the insurance coverage at the end of the specified period.
• Convertible Term: The policy holders have the right to convert the term policy to permanent policy.
• Group Term: The insurance can be purchased by employer and professional associations. That type of insurance covers more people and it also reduces the premium.

2. Permanent Life Insurance: This category of life insurance provides coverage through the insured life time. The different types of permanent life insurance are:

• Indexed universal life: This type of insurance permits more flexible premiums.
• Traditional whole life: The insured gets lifetime premium and also includes an element of cash value.
• Universal life insurance: This type of insurance includes flexible premium, flexible face amount, and unbundled pricing factors.
• Single premium whole life insurance: The whole insurance can be purchased with single amount of money.