| Life insurance, at its core, is a means to | | | | Whole life insurance policies were long "the |
| protect the financial security of one's | | | | norm" in the insurance industry.Universal |
| survivors. It is generally thought of as a | | | | Life InsuranceUniversal Life Insurance is |
| way to provide income replacement for a wage | | | | considered a more flexible approach to life |
| earner's survivors in the event of death. | | | | insurance. The required regular premium |
| Life insurance is purchased from an insurer | | | | amount can vary as long as the policy has a |
| by making regular payments of premiums during | | | | cash value in excess of the policy's costs. |
| the life of the insured. Upon the death of | | | | The insured can alter the policy's future |
| the insured, designated beneficiaries receive | | | | payout while the policy remains in force, |
| a financial benefit.Although all life | | | | making it a flexible insurance solution for |
| insurance policies maintain those consistent | | | | those who may have more complicated or |
| characteristics, there are different means to | | | | rapidly-changing needs than can be addressed |
| achieving the same end. Four distinct types | | | | with term or whole life solutions.Variable |
| of life insurance have been developed and are | | | | Universal Life InsuranceVariable Universal |
| in common usage.Term Life InsuranceTerm life | | | | Life Insurance takes the flexibility of |
| insurance is probably the most basic form of | | | | universal life coverage and adds to it by |
| life insurance. Term insurance is purchased | | | | providing investment choices. The policy's |
| for a specific period of time (the term). | | | | cash value is not based simply on an interest |
| The length of the term can vary considerably. | | | | rate determined by the insurer. Instead, the |
| There are term policies that are effective | | | | policy's value is based upon the performance |
| for well over twenty years, whereas some only | | | | of various investments. The insured |
| involve a one-year term. A regular premium | | | | allocates his premiums among a series of |
| is paid throughout the term. If the insured | | | | investment options with a variable universal |
| dies at any point during the term, the | | | | life insurance policy.Although all insurance |
| designated beneficiary receives the death | | | | policies do share common characteristics, the |
| benefit. If one survives the term, however, | | | | four different types of insurance policies |
| there is no payout and the policy simply | | | | have some marked differences. Each type of |
| ends.Whole Life InsuranceWhole life insurance | | | | insurance policy has advantages and |
| has a long history and maintains great | | | | limitations. For some, a simple term policy |
| popularity. The cost of premiums is | | | | will more than suffice to meet their life |
| guaranteed for the entire time the policy in | | | | insurance needs. Others may benefit |
| place. As premiums are paid, the insured | | | | considerably from a more full-featured |
| accumulates a cash value for the policy, with | | | | insurance policy that includes an investment |
| the insurer determining the interest rate | | | | component and the ability to alter the nature |
| applied to that cash value. One may either | | | | of benefits and the premium.Evan C Davis |
| "cash out" their whole life policy, or | | | | works in Medicare customer service, and is |
| maintain it so that benefits are paid to | | | | the webmaster and owner of Instant Health |
| survivors upon the policyholder's death. | | | | Insurance. |