Common types of life insurance
Life insurance is a vital aspect of financial planning that can provide peace of mind for families and loved ones in the event of an unexpected death. However, not all life insurance policies are created equally. There are several different types of life insurance policies available, each of which offers unique features and benefits. Some of the most common types of life insurance include:
- Term life insurance
- Whole life insurance
- Universal life insurance
- Variable life insurance
Term life insurance is the most basic and affordable type of life insurance. It provides coverage for a specific term, usually ranging from 10 to 30 years, and pays a death benefit to your beneficiaries if you die during that term. Whole life insurance, on the other hand, provides coverage for your entire life and also includes a savings component known as cash value. Universal life insurance combines the affordability of term insurance with the cash value savings component of whole life insurance. Finally, variable life insurance offers policyholders the opportunity to invest their policy’s cash value in various investment options, such as stocks and bonds.