Different Types of Life Insurance Coverages

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There are basically 7 types of the insurance business. They include life or personal insurance, property insurance, marine insurance, guarantee insurance, social insurance, liability insurance, and fire insurance.

But in today’s article, we shall be focusing on the different types of life insurance coverage and why you should get them. 

We shall also talk a little bit about how to get an affordable life insurance quote for any of the types of life insurance we discuss. 

Why do I need life insurance coverage?

The question in the mind of most people right now is, “Why exactly do I need life insurance coverage?” Whether you are single, engaged, or married you need life insurance to help cater to your loved ones when you die.

When you have life insurance coverage, it will help your family sort out your funeral expenses, debts, and other financially demanding activities caused by your demise. That way, you won’t be putting a burden on your loved ones.

Parents with life insurance coverage can rest assured that their dependents will not go through financial struggles when they die. Life insurance makes it easy for dependents of a life insurance policy to receive death benefits in the event of their death.

Another interesting benefit of life insurance most people hardly discuss is that it can help you to easily build wealth. It’s best defined as a tax-free investment. This is one of the most powerful investment secrets smart entrepreneurs in the United States are using to build their wealth massively.

Related: The Advantages and Disadvantages of Buying a Life Insurance Policy for Your Kids

Here are the different types of life insurance policies:

1. Whole life insurance coverage

Whole life insurance policy is a form of permanent insurance that covers the policyholder for the rest of their life, rather than for a limited time like term life insurance coverage. 

Whole life insurance coverage which is also known as ‘straight life’ or ‘ordinary life’ gives the policyholder a lifetime coverage and also a guaranteed amount to pass on to beneficiaries, so long as you remain insured until you die. How whole life insurance coverage works is that as you keep renewing your contract, the beneficiary of the life insurance policy will remain entitled to all the full benefits.

Before deciding to buy one, you may need to do your due diligence in finding the company that has the best whole life insurance policy near you. Whether you are in the United States, Australia, United Kingdom, or Canada, you can get an affordable whole life insurance quote online without doing multiple phone calls.

Related: How to Choose the Best Life Insurance Company

2. Term life insurance coverage 

Nobody loves to think about death but it happens anyway. There’s absolutely little or nothing you can do about it when it comes knocking. However, you can build a well of the financial reserve to take care of your loved ones using term life insurance.

Term life insurance is a type of life insurance policy where the policyholder pays a fixed amount of money for a limited time. Term life insurance is also known as term assurance. If the policyholder dies within a specified time, the insurer pays the beneficiary a guaranteed amount of money.

Related: Why Stay at Home Parents Need Term Life Insurance

What happens if you outlive your term life insurance policy?

What happens to term life insurance at the end of the term is that if you outlive your term life insurance policy you will forfeit the funds to the insurance company. The moment your policy ends, coverage automatically ends. You won’t pay any further premium and neither are your beneficiaries going to claim any benefit.

From the comfort of your home, you can get your term life insurance quotes online without a phone call. You can even use the online calculator and term life insurance comparison sites to know what your premium will be.

Factors that can affect term life insurance quotes

Over 73 million searches are made on Google Search regarding what the term life insurance quotes for seniors are. That shows that nobody actually wants to overpay in their premiums. 

Some of the factors that affect your term life insurance rates or quotes are: age, driving record, health status, medical history, lifestyle, and gender.

To get an affordable term life insurance quote online, you may need to check for insurers near you. The best term life insurance companies can be found in the United States, Australia, Canada, the UK, and even New Zealand. Do not forget to also use comparison sites.

Related: How to Get the Best Deal on Life Insurance with a Spotty Driving Record

3. Universal life insurance coverage

Universal life insurance works mainly in the United States. If you are outside the U.S. life insurance agents near you may not have marketed this type of life insurance to you.

How does universal life insurance policy work, you may ask? Universal life insurance policy allows you to pay a monthly fee that your insurer would split into two. One is used to cover for your life insurance while the second one goes into your savings and investment account.

It’s generally believed to be more flexible because you are allowed as the policyholder to decide how much premium you are willing to pay over a certain period of time.

The different types of universal life insurance policies are indexed universal life, guaranteed universal life, and variable universal life. The last one allows you to invest the cash value into mutual funds.

You may need to consult a reliable life insurance company in the United States to help you come to an informed decision before choosing the type of life insurance policy that is fit for you.

Related: How to Get the Best Car Insurance Quotes at an Affordable Price

What are the disadvantages of a universal life insurance policy?

For so many reasons, we don’t recommend that you take up a universal life insurance policy. What happens to that cash value set aside from your life insurance coverage when you die is that your family members won’t have access to it. The only payment the beneficiary of the life insurance policyholder will get is the death benefit amount.

If for any reason you withdrew some of the cash value, that same amount will be subtracted from your death benefit amount.

You can use the life insurance calculator of any insurer that sells a universal life insurance policy to know what your rate will be. On some comparison sites, you can find what your universal life insurance rates will be by age chart.

Related: Global Trends in the Life Insurance Industry

Advantages of universal life insurance policy

Despite the seemingly uncomfortable disadvantages of universal life insurance coverage, some people still prefer it to whole life insurance because it’s not only permanent but the cash value that goes into its savings component is a valuable place to borrow money from when you want to sort out pressing needs.

Mortgage life insurance coverage

The first question we need to address is:

What is a mortgage?

A mortgage is a loan taken out to buy property or land. Most mortgages run for 25 years but the term can be shorter or longer depending on the repayment plan you consider to be more convenient for you. The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess your home and sell it so they get their money back.

Related: How to Get Money Quickly to Pay Rent If You Are Behind

Why mortgage life insurance is good

When taking a mortgage, it is advisable to also take mortgage life insurance policy to help the policyholder protect the property they purchased with the loan in case they die within the repayment period.

Mortgage life insurance is a form of insurance specifically designed to protect a repayment mortgage. If the policyholder were to die while the mortgage life insurance was in force, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage.

With mortgage life insurance, you can be assured that your family won’t suddenly become homeless after your demise.

You can use a mortgage life insurance calculator to know what your quote will be. Or speak to an agent near you for more information about how much life insurance you need.

Types of Life Insurance Policies

We have done well in discussing the various types of life insurance policies available, why you need any of them, disadvantages, advantages, and factors that will influence your life insurance rate. It is time to take action

You can compare term and whole insurance policies or whole life and universal life insurance policies to decide which one to go for. Don’t forget, you can always reach out to a reliable life insurance company near you for more professional guidance.


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