Life Insurance Facts

There are many different types of life insurance policies that you can buy. When it comes down to it they all have one thing in common; they will provide money to your beneficiary when you die. But with that being said, this is about the only similarity that the different policies share.

Here is a breakdown of the four different types of life insurance policies that you can buy.

1. Term life insurance is among the most common, and these policies are not difficult to understand. You will buy a policy that covers you for a specific term, such as 15 years, 30 years, etc. If you die during the term that you are covered, your beneficiary will receive your benefits. Of course, if you live longer than the term you will not get anything.
2. As opposed to term life insurance, with whole life insurance policies you are covered for your entire life. These policies cost more than term because they provide more than just death benefits. In addition, a whole life insurance policy also accrues a cash value as you pay your premiums. This way over time you can withdraw money, or even take a loan against your policy.
3. A universal life insurance policy gives you the ability to decrease and increase your benefits as you see fit. Its main selling point is the flexibility that it offers.
4. Many people think that variable life insurance is the same as whole, but this is far from true. With variable life insurance you will invest the cash value of your policy into money market accounts, bonds, and/or stocks. This means that the investments you choose will determine both the cash value of your policy, as well as the death benefits.