Types Of Life Insurance, What’s The Difference

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Why would you want to read this blog post? You’re looking for some clarity on life insurance. What is the difference between term and permanent life insurance?

Which one should I choose? How can I save money when it comes to buying life insurance? These are all valid questions that will be answered in this informative blog post!

Senior Consumers have a lot of questions about what type of life insurance they need, how much coverage they need, and where to buy it from. We’ll answer those questions with information and facts in this article.

The first thing we’ll discuss is the types of life coverage. There are five main types: term, whole, universal, variable/universal-life, and final expense policies.

What Are The Different Types of Life Insurance

Learn the differences now!

Summarizing The Different Types of life insurance. Most people aren’t aware of how many types of life insurance options there are out there. There is never one right answer — different kinds of life insurance work better for different people. The most basic categories are term and permanent.

However, within these two categories are several options to choose from.  The question is what type of life insurance do I need?  Below are the different types of life insurance explained…

10 Types Of Life Insurance That Are Currently Available

Many clients ask, what is the best type of life insurance to buy? 

• Term Life Insurance
• Permanent Life Insurance
• Whole Life Insurance
• Universal Life Insurance
• Variable Life Insurance
• Variable Universal Life Insurance
• Simplified Issue Life Insurance
• Guaranteed Issue Life Insurance
• Final Expense/Burial Insurance
• Group Life Insurance

Honestly, it truly depends on you and your family. There are factors that will determine how your independent agent would guide you to get the best carrier at the best rate.

In addition, the following will also determine what your monthly/yearly premium will be:  

1. age
2. family
3. health
4. family medical history
5. occupation
6. smoker vs non – smoker
7. gender
8. DMV/driving history/record

Types Of Life Insurance Term vs Whole

Types of Term Life Insurance Policies

• Term Life Insurance — This is the most popular kind of life insurance on the market. Term life insurance offers solely death benefit protection. The plans are quite affordable, but the coverage is temporary. You’ll need to decide on the length of your term. Usually, you’ll choose between a 10, 15, 20, 25, or 30-year policy. All of the top life insurance companies offer term life insurance. You can research how much a million-dollar life insurance policy will cost you.
• Increasing And Decreasing Term Life Insurance — Depending on the kind of term life insurance, the death benefit will go down in time. These are called decreasing term life insurance policies. With these policies, the policy ceases when the death benefit reaches zero. This is a popular option for those that want to cover a mortgage.

Types of Whole Life Insurance Plans

Whole life insurance policies have cash value… see below. 

• Permanent Life Insurance — Unlike term life insurance, permanent life insurance has a cash value build-up element. Furthermore, permanent life insurance policies will cover you for your entire life, as long as you continue to pay the premium.
• Whole Life Insurance — This is the most basic kind of permanent life insurance. For whole life insurance, the premium will remain the same for your entire life. This means if you apply when you are young and healthy, your premium will be quite cheap for the duration of your life. However, those that can only get high-risk life insurance will need to pay far more. Whole life insurance has a nontaxable cash value build-up component

The Most Expensive Type Of Life Insurance Is Whole Life

WHY WHOLE LIFE INSURANCE IS NOT MY FAVORITE PRODUCT TO OFFER MY CLIENTS

Why Whole Life Insurance is Bad!  Whole life insurance is much more expensive than term life insurance.  The premium amount stays the same for the lifetime of the policy.  

Sure, I make more of a commission from clients purchasing whole life.  However, it is not the best product for most people.  Especially for today’s young families.

However….

Who Whole Life Insurance is GOOD for…  Seniors. Why?  Guaranteed, lifelong protection, living benefits, which pays for their final expenses.  

Cost of premiums never increase. In most situations, there would be no medical exam for this policy as well.

 As we have stated above, whole life has a cash value component. As long as you pay your premiums, you are granted to lock in at a level rate, paying your premiums.

For your Business Owners… From a business standpoint, whole life is great for affluent people/consumers who would like to over-fund as a contribution strategy to defer taxes down the line.

Different Types Of Universal Life Insurance

• ​Universal Life Insurance — This is another kind of permanent life insurance. Universal life insurance has everything that whole life insurance offers, but the difference is that their cash value build-up component is more flexible.​
• ​Variable Life Insurance — This form of permanent life insurance allows the policyholder to have a more active role in the cash value investment opportunities, such as equities. This is more of a high-risk, high-reward option since the funds are dependent on the market.​
• ​Variable Universal Life Insurance — This is nearly the same as traditional universal life insurance, except the policyholder can invest their cash value into different investments, such as mutual funds. Also, there is no guaranteed minimum interest in this kind of policy.​

Life Insurance For Married Couple

Joint Life Insurance For Married Couples

Survivor-ship Life Insurance — With this form of life insurance, more than one person is covered by a single policy. There are a few ways to set up your policy.

First to die, for example, will pay out the other person after one of them passes away.

Last to die, on the other hand, pays out after the second person passes away.

While the premiums on these plans are more expensive, it is cheaper than buying multiple policies.

Final Expense/Burial Insurance

FINAL EXPENSE LIFE INSURANCE AND NO EXAM LIFE INSURANCE

• Final Expense/Burial Insurance – Final expense life insurance, otherwise known as burial insurance, is for people between the ages of 50 and 85. These policies are very affordable and are designed to cover final expenses, such as a casket, headstone, etc. The average burial costs around $10,000, which is a hefty bill to leave your family. It’s easy to be approved for final expense insurance. This policy is very common for life insurance 75 and over.
• No Medical Exam – As you might’ve guessed by the name, no medical exam life insurance does not require applicants to undergo a physical. This is a great option for people that are having difficulty getting covered due to poor health conditions. No medical exam life insurance also begins coverage quite quickly after applying. However, the plans can be quite expensive.

Dividend-Paying Whole Life Insurance

Whole life policies that benefit from profits are then paid to the policyholders. Overall, these are usually participating whole life insurance carriers.

For example, a term life rider and infinite banking will allow you to get the coverage you need as the cash value accelerates growth.

WHO NEEDS LIFE INSURANCE

YOU DO!!!  Your family and children depend on you for financial support.  Remember, When You die,  YOUR PAYCHECK DIES WITH YOU!!!  Be the superhero of your family!

Conclusion

COMPARING DIFFERENT TYPES OF LIFE INSURANCE POLICIES

Whether you are leaning towards a universal life insurance policy, term life insurance policy, etc., make sure that you are getting a set of quotes before deciding on a policy. This way, you’re more likely to find affordable coverage. Choosing from so many types of life insurance can be a difficult process, but the most important thing is that you get some sort of life insurance coverage. 

 Because there are so many different choices, it is best to speak with an Independent Agent to help you compare life insurance companies and quotes.  It can be frustrating with so many types of life insurance policies/carriers available. We can help you narrow down your choices based on your family’s needs.

Danny Ray Founder/Independent Agent

Hi!  I am Danny Ray of PinnacleQuote Life Insurance Specialists.  We are based out of Jacksonville, Florida.   Although we are in the sunshine state,  we are licensed in 50 states.  I am YOUR independent agent. I work for YOU!  My passion is the Art of Life Insurance and making sure you and your family are Properly PROTECTED!

I also have a family, so I know how important that is.  The moment your child is born, you have flashes of the future, School, Prom, Graduation, Marriage ETC…  God forbid you suddenly die, your paycheck dies with you.  So my job and goal is to make sure what you envisioned for your family is kept intact even in your absence.  The only way to do that,  is Life Insurance!

Think of it this way,  Life Insurance is the last way to say “I LOVE YOU” to your family

If you find yourself asking what is the best type of life insurance after you have done some research, then that is the time to call me.  I will work around your schedule.  Call my assistant Lisamarie and she will schedule a phone appointment at your convenience!  (855) 380-3300 or you can email Lisamarie: 904Lisamarie@gmail.com.

Learn more about Financial Planning CLICK HERE

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Conclusion

Do you know what kind of life insurance will work best for you? You may want to explore the different types and find out more about how they work. There is never one right answer — depending on your needs, a term or permanent policy might be better suited for you. If this all sounds overwhelming, reach out to our team today! We can help you figure out which type of plan would suit your situation best while still meeting your budget requirements. No matter where you are in the process, we’re here to help! Get a quote now by filling out our short form below and start getting peace-of-mind coverage that fits your lifestyle.