Types of Life Insurance Policies

Effective wealth management begins with regularly evaluating your financial goals and objectives and using the right strategy to attain them. Life insurance, while usually overlooked as a planning tool, can provide various benefits for individuals, families and businesses.

Here are more life insurance options that you can select from:

Term and Permanent Life Insurance

Term insurance is usually your cheapest short-term insurance option, but unless you use it before its term ends, coverage can expire or become cost-restrictive. On the other hand, permanent life insurance requires higher monthly premiums but comes with a death benefit, irrespective of when you die, plus other benefits, like tax-deferred investing, flexible premiums, etc. It also gives you other benefits 

(Universal Life Insurance

The best advantage of UL policies is flexibility. To start with, you can have variable premiums and a reduced death benefit. They offer a cash value too, or premiums that you have paid on top of the policy’s current cost. The cash value balance will even acquire interest according to the rate dictated by the insurance provider (based on the yield of the general account) before being invested in superior-quality corporate bonds. After a while, you can borrow against a portion of your cash value or just withdraw some of it, while keeping your guaranteed death benefit as is. 

No-Lapse Guaranteed Universal Life Insurance

As long as you pay your premiums on time, your death benefit under a GUL policy is guaranteed. These policies are cheaper since your premiums are calculated to maintain a consistent payment until you die.

Indexed Universal Life Insurance

IUL policies are highly similar to UL policies save for the cash value interest rate being determined by a wide market index, and the rate of return being subject to a maximum and minimum rate to be determined by the insurer. Because these policies’ cash value balance can earn a higher rate of return, IUL premiums are often cheaper than typical UL policies with equivalent death benefits.

Variable Universal Life Insurance 

VUL, UL and IUL policies have many similarities but with VUL, the cash value is automatically put into investments like mutual funds, which then determine the rate of return that the balance will earn. You also have the freedom to select your own investments but with a considerably higher performance risk. 

Whole Life Insurance

WL policies let you pay consistent premiums throughout their life and guarantee cash value accumulation. As the policy matures, the cash value will be the same as the policy’s death benefit. Like UL insurance, WL policies can also let you borrow against your accumulated cash value. The main difference is that WL policies are not as flexible as UL policies in terms of premium, cash value and death-benefit adjustments.

View site for more info on life insurance: https://en.wikipedia.org/wiki/Life_insurance.