Choosing Between Term Life Insurance And Permanent Life Insurance
Life insurance is essentially a contract involving an insurer contract, whereby an insurer promises an insurance premium to an individual insurance cover holder, on the death of that insured person, for an agreed period of time, in return for an agreed amount of cash payment from the individual. The term life insurance contract can be used to describe the entire life insurance system, including term life, endowment life, variable life, universal life, survivorship life and whole life insurance. In general, however, the term covers any kind of life insurance. Our website provides info on Kim Austin – State Farm Insurance Agent – Abilene life insurance
Whole life insurance generally provides coverage on a cash value basis for your life. It usually also covers your dependents and some investment value. This kind of insurance is usually purchased directly from the insurer with a guaranteed monetary value and terms and conditions. A typical form of this kind of insurance is the variable life policy, which allows you to choose among a variety of policies. For example, there is a small death benefit, and you also get a lump sum death benefit upon your death. You are also insured against a host of other risks, such as loan interest and investment risks, among others.
A third option is the permanent life insurance policy type. As the name implies, it provides coverage for an indefinite or lifetime time. You also get to choose among several different risk categories, including the whole life option, which pays an initial cash amount equal to your death benefit upon your death; the variable universal life (VUL) option, which give you the choice among a host of different risk options, as well as a variable TIVA, and a limited benefit funeral payment plan. The other main kinds of permanent life insurance include whole life, endowment life, variable universal life, survivorship life, and limited payment life insurance. While most people go with whole life insurance policies because they offer the most permanent coverage at the most affordable premiums, people with endowment policies (also called variable universal life) often choose this one because it allows them to make payments for their death benefits that are based on what their dependents would receive upon their deaths. People who get the survivorship life insurance policies usually do so because they expect to have a child after receiving the proceeds from their policy.