What Life Insurance Companies Offer
The major types of insurance policies offered by life insurance companies are summarized below. It should be noted that all of these types are not offered in all countries, and in some instances the terminology may differ. These are the four types of life insurance most commonly purchased in the United States.
- Whole Life Insurance – This is the most commonly purchased type of insurance, and is offered by nearly all major life insurance companies. Upon purchasing a whole life policy, the amount of each payment on the premium will never change, nor will the amount of coverage. Whole life insurance is sometimes called Cash Value Life Insurance, as some policies will assume a cash value that increases over time, an amount which is made available upon cancellation of the policy. A cash value life policy is not offered in all countries, and not all whole life policies issued in the United States are cash value policies.
- Term Life Insurance – A term life insurance policy is either taken out for a specified number of years or it remains in effect until the insured reaches a certain age, usually 65. The premium payments remain the same for the life of the policy. When the policy terminates, at age 65 for example, there is no payout. The insured receives no benefit, and makes no further payments. Term life policies do not have a cash value provision.
- Variable Term Insurance – Variable term insurance policies are characterized by initial low premium payments which then increase over time. This type of policy is often popular with young families who desire adequate coverage, but are not yet able to afford higher premiums. Some variable term polices have a cash value feature.
- Guaranteed Life Insurance – Not all insurance companies offer guaranteed life insurance policies, in fact most do not. When applying for life insurance, the applicant’s health can directly influence the size of the premium and whether a policy will be issued. Applicants normally have to take a physical examination to qualify for life insurance. This is not the case with a guaranteed life insurance policy. Health is not an issue, but the premium and payments on the premium are much higher. People normally only purchase a guaranteed life policy when they cannot get a whole life or a term life policy because of their health. Guaranteed life insurance policies can be expensive policies.
The size of the premium you pay will depend upon the type of policy you choose, and will vary somewhat form company to company. Insurance companies determine the amount of premium based on statistical risk. If the statistics indicate you should have a long life in front of you the premium will be lower. if not, it will be higher.
We can help you decide which type of life insurance policy will be best suited for you, based upon your age, health, and general lifestyle. We offer free quotes along with useful advice and information. Give us a try. There’s no obligation.