Free Life Insurance Leads Guide

Life insurance protects your loved ones financially in the event of your death. There are various types of life insurance policies. An important part of purchasing a policy or any product would be first finding out the difference between them and buying the one that suits you best.

A few types of life insurance policies are as follows.

1. Term insurance: As its name suggests it is only good for a certain period of time. It is the simplest form of insurance, and is usually the most inexpensive form of life insurance. Here you get coverage for a particular period of time which is your term. This term could be 10, 20 or 30 years and can be renewed after the term expires. This type of policy does not have any cash value; the only way your family will get anything is if you die within the term. Every year a premium has to be paid, this covers the risk of death in that year. In the event of your death your beneficiary gets the money without any income tax.

2. Whole life: This type of life insurance is similar to term insurance but comes with a slight variation. In this case the policy covers your whole life and not just a particular period. The premiums that you have to pay will remain same through out the life of the policy. Some part of the premium gives cash value. You can borrow up to 90% of your policy’s cash value that too free of tax.

3. Universal life: This insurance policy comes with the advantage of higher earnings on savings. It is similar to whole life insurance, with only slight differences. It is very flexible in terms of premium; they can be increased or decreased as and when required. These policies offer a guaranteed return on cash back value. This policy has a drawback, the fees is usually very high.

4. Variable life: This policy is generally characterized by fixed premium. It also provides control over your policy’s cash value. Your cash value is invested as per your desires. If your investment choices are good then your cash values and death benefits will rise and vice versa. You must also keep in mind that fees for such policies may be even greater than the fees for universal life policies.

Variable life insurance is an insurance policy that is permanent and also has an investment addition. This insurance plan also has death benefits and cash values that fluctuate according to the experience and knowledge of the company who is managing the account. This kind of policy is registered with the Securities and Exchange Commission and is sold by brokers and is not to be confused with gimmicky life insurance policies such as mortgage life insurance.

This particular policy has a cash value account, which is normally invested in several sub-accounts within the policy. A sub account is a lot like a mutual fund account but the difference is that the mutual fund is only available within the variable life insurance policy.

Variable life insurance policies are appealing to many because of its investment qualities and the positive effects of taxes within the policy’s cash value growth.

There are pros and cons with a variable life insurance policy. This policy allows you the policy holder to invest in several good options and at the same time, not being taxed on your earnings. What is interesting with this policy is that you can apply the interest you earn on such investments toward the premiums—and that lowers the amount you pay.

The cons of the insurance are that you take full responsibility for the risks in the policy. Should the investment funds do poorly, you may have to pay more to keep the policy going. In addition you will also not be able to withdraw the cash value during your lifetime.

If you are looking for insurance protection that usually lasts a lifetime, cash value that has market growth potential and is flexible with the many changes that can occur in one’s life, then this policy may be for you. However, if you skip or postpone your premiums, the cash value of your policy can affect the cash value of your policy and alter your death benefit. And, it may also increase your premium requirements later on.