Types of life insurance
Term life insurance covers a limited period of time, that can be 10, 20 or 30 years, some companies even offer up to 35 and 40 years. It doesn't build cash value but is rather a fixed rate of the stated death benefit. In the unfortunate occassion of the insured person's death during the policy's duration, it pays that benefit to the designated beneficiaries. When the term life insurance expires, it can either be renewed by the policyholders for another term, converted for a permanent policy or terminated.
Permanent life insurance is a general name for a life insurance policies that never expire. Permanent life insurance policies costs are higher than the costs of term life insurance policies however it provides extra benefits such as cash value, the savings element of permanent life insurance, which can be loaned against the policy by policyholders to use for large expenses, grows and build value over time. Whole life insurance is the most familiar permanent life insurance form. Other permanent life insurance types include universal life insurance, variable life insurance and variable universal life insurance.