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Types of life insurance plans

There are several types of life insurance plans. The Investopedia edition elaborates on them.
Types of life insurance plans

Term Life insurance

This type of insurance only provides coverage if the insured dies within a specified period, known as the term of insurance. If the insured event does not occur during this period, the insurance benefit is not paid out. This type of insurance is usually the most affordable.

Whole Life Insurance

In this case, the policy provides lifetime coverage. It also has a cumulative component that allows accumulate the value of the policy over time. Part of premium paid on top of the cost of insurance coverage is invested by the insurance company. The policyholder may also access accumulated funds in the form of borrowed funds or partial withdrawals.

Universal Life Insurance

This is a hybrid type of life insurance that combines elements of life and investment insurance. Universal life insurance provides flexibility in determining the amount of premium and sum insured. One can also adjust the level of coverage and the accumulation of funds within the policy.

Indexed Universal Life Insurance

This type of life insurance is a variant of universal life insurance, where the insurance company is linking the amount of savings with a specific financial index, such as stock index or stock market index. This allows earn a potentially higher return on investment related to the insurance policy.

Each type of life insurance has its own characteristics and perks. The choice of a specific plan depends on your individual needs, financial goals and the risks you want to cover. It is recommended that you consult with a financial advisor or insurance agent to determine the most suitable life insurance plan for you.

Source: https://www.investopedia.com/types-of-life-insurance-plans-and-how-to-decide-which-one-is-right-for-you-7482251

Photos are from open sources.

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