There are different types of life insurance available to choose from. Each type of life insurance offers different benefits, from flexible premiums to cash value in addition to the death benefit.

Term Life Insurance

One of the most popular options for life insurance is a term policy. This is also one of the most affordable types as the premium remains the same for the entire duration of the policy term, whether the insured opts for a 10-year term, 25-year term or a 30-year term. The main difference between term life insurance and other types of life insurance is that the term life insurance policy provides coverage for a specific number of years, and the beneficiaries will only receive the death benefit if the insured dies within that period. Term life insurance policies may include a provision that allows the insured to renew coverage at the end of the term. However, premiums may be higher for the subsequent terms.

Whole Life Insurance

After term life insurance, whole life insurance is probably the most popular. With this type of life insurance policy, coverage is active over the life of the insured from the time the policy goes into force until the insured’s death, as long as the insured continues to pay the premiums. In addition to the permanence of this life insurance type, another benefit is that it comes with both the death benefit and cash value.

Universal Life Insurance

Another permanent life insurance option is a universal life insurance. Just like whole life insurance, this option comes with cash value in addition to the death benefit. The biggest difference between whole and universal life insurance is that universal policies offer flexible premiums. An insured can increase or decrease the amount they pay for their monthly premium. If the insured chooses to decrease the premium amount, the difference may be withdrawn from the policy’s cash value.

Variable Life Insurance

Yet another permanent option, variable life insurance allows policyholders to invest the money from the cash value of the policy in different investment options that the insurance company offers. Because of this, the cash value depends on market conditions and is not guaranteed. However, the death benefit still comes with a guaranteed minimum.

Final Expense Insurance

Final expense insurance, also commonly referred to as burial insurance, is a type of permanent life insurance. Final expense insurance policies are typically designed to cover funeral costs and related services even though the policy proceeds can be used for other expenses.