When you think of life insurance, you probably think in terms of the traditional product that pays for a funeral and perhaps a payment to a beneficiary. Life insurance is really much more diverse than that. This guide from Dune Lakes Insurance of Inlet Beach, FL summarizes the main types of life insurance and explains the differences between them. It includes information on which types contribute to your investment portfolio by accruing value.
You’ll find three major kinds of life insurance, permanent, specialty and term. Of those, term and permanent are the most common. Within those types of insurance, you’ll find numerous policy types:
- level term,
- non-level term,
- whole life,
- universal life,
- indexed universal,
- final expense life,
- group life,
- accidental death and dismemberment (AD&D),
- joint and survivorship.
Permanent insurance is also called whole life. Its variations include variable universal life, universal life, variable life, and traditional whole life. The American Council of Life Insurers reports that in 2016, 6.4 million whole life policies were purchased.
Term Insurance only pays if the person dies within the policy coverage years. Common term policies last 30 years, so death must occur during year one to 30. The only benefit is the lump sum payment. With a level term, the death benefit remains the same year to year, while with the decreasing term, it decreases in one-year increments as the policy years pass.
Specialty insurance refers to items like AD&D coverage which pays a benefit if the insured dies due to an unforeseen accident like a car wreck. It also pays if the insured survived the accident but suffered dismemberment.
Life insurance can be confusing. Contact Dune Lakes Insurance of Inlet Beach, FL to figure out which policies work best for you. We’ll help you get the right insurance to provide for your future.
