What kind of life insurances are there?

Question

What kind of life insurances are there?

Answer 1

Life insurance is designed to protect a family against the financial burdens that accompany the premature death of a breadwinner. Would your death pose such a hardship? If so, you have two options: term life and whole life. You pay a monthly premium with each. A term life policy will pay a death benefit in the event that you die during the specific time, or term, covered by the policy. A term life policy has a start date and an end date. If you die the day after the policy ends, the insurance company does not pay a death benefit. The premiums that you pay for a term life policy will be gone when the term is up.

A whole life policy covers your for your entire life. If you die the day after you take out the policy, you are covered. If you die in 20 years, you’re covered. And if you die when you’re 80, you’re covered. In the mean time, the insurance company invests the money you pay in premiums, and some of the earnings are put into your policy in the form of cash value. The cash value builds over the years. At some point—when you are on a fixed income, for example—you can use your cash value to pay the premiums, keeping your policy in force. A whole life policy costs much more than a term life policy does, however. Good luck!

Answer 2

In terms of straight life insurance, the only one you should consider is "term." Universal or whole life policies where there is a savings component or "cash value" are useless. A life insurance policy should be purely for leaving your HEIRS money. If you want to save, use a financial adviser who can advise you on money market funds, ETFs and so on.

In terms of what I call "living" insurances, you may also want to consider critical illness insurance. This will help YOU if you become ill from about 22 to 25 different kinds of conditions, such as cancer. It's a lump sum payment and will be useful if you cannot work.

Answer 3

Too broad of a question to answer here - but you basically have PERMANENT insurance and TERM insurance or a variation of the two.

Good luck and I hope this helps!

Answer 4

All life insurances are death insurances and there is only one death.