1. Term life insurance- this has a particular end date for the level term period, during which rates remain constant. You can renew the insurance after this time frame, but the annual prices will increase. There are typically options for 5, 10, 15, 25, or 30 years of coverage. The cost is the cheapest way to buy life insurance.
2. Whole life insurance- can offer protection for the rest of your life. The policy's cash value is accrued over time by using a portion of your premium payment and interest. There are built-in assurances in a policy that the premium won't go up, the death benefit won't change, and the cash value will earn a set return.
3. Universal life insurance- is challenging to comprehend due to its diversity and vastly distinct properties. Because it typically doesn't provide the same guarantees as whole life insurance, universal life (UL) can be less expensive.
4. Variable life insurance- offers cash-value perpetual insurance. The decision of which sub-accounts to invest in by the policyholder determines the rate of growth of the cash value account. Based on how your sub-accounts perform, you could also lose money.
5. funeral insurance- Whatever the name, it's typically a modest whole life insurance policy designed to cover solely the cost of a funeral and other final expenses. Burial insurance is frequently promoted as a non-discriminatory coverage that doesn't call for a physical.
6. Survivorship life insurance- These combined life insurance policies protect two people, such as a husband and wife, under a single policy. Once both have passed away, the beneficiaries will receive their reward. The industry is eschewing the term "second-to-die life insurance," but you may still hear it. This is understandable.
7. Mortgage life insurance- designed to pay only the remaining balance on a mortgage. There are two key ways in which this policy type differs from the previous types of life insurance. First off, the mortgage lender receives the death benefit rather than the beneficiary you specify. Second, if you insured only a portion of the mortgage, the payout is only the remaining sum.
These are the main types of life insurance that are present