Term Life Insurance
Term Life Insurance provides death protection for a stated time period, or term for a specified premium. It is usually considered the simplest form of life insurance. It was developed to provide life insurance for a limited period of time, for an inexpensive rate. Since term insurance can be purchased in large amounts for an inexpensive premium, it is well suited for short-range goals, such as to cover loans or income replacement during child-raising years.
Universal Life Insurance
Universal life insurance offers death benefit protection but also has a savings element which is invested and can provide a cash value build up. The death benefit, cash value build up, and premiums can be reviewed over time and can be changed to meet the policy owner’s needs if desired. Universal Life was built to give the policy owner flexibility with their policy.
Whole Life Insurance
Whole life provides insurance for the insured’s whole life as long as a specified premium is paid. It also has a savings component that builds over time and can be used in wealth accumulation. The insurance company essentially makes all the decisions regarding the policy. Regular premiums both pay insurance costs and cause equity to build in the saving account. A fixed death benefit is paid to the beneficiary along with the balance of the savings account.
Indexed Universal Life Insurance
Indexed universal life is very much like regular universal life, however instead of a declared interest rate the actual rate earned is tied to a calculation against different stock market indices. It does provide a floor by way of a minimum interest rate. This allows for the policy owner to share in some of the upside of these markets without the down turns.
Variable Universal Life Insurance
Variable universal life has the flexibility that other universal life offers, however it is tied to certain mutual funds to credit the interest rate within the policy.