Life is unpredictable. None of is know what’s going to happen tomorrow. So it’s important to ensure that your family and loved ones are taken care of financially in case something should happen to you. This is where life insurance comes in.
There are three different types of life insurance policies:
o Universal life insurance,
o Cheap whole life insurance
o Cheap term life insurance.
Universal Life Insurance: This combines life insurance with savings. Insurers receive the benefits of term life insurance and combine that with tax-deferred interest accumulating savings account. If your money to pay the death benefit and other costs accumulates in the tax-deferred savings portion of your policy, then premiums may not be required to keep the policy in force.
Cheap Whole Life Insurance: This policy covers you for your entire life. The death benefit and premium always remain the same. The policy builds cash value, which could enable you to earn a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you are also able to borrow against that money.
Cheap Term Life Insurance: This is low cost life insurance and great for young individuals who are healthy and may not be able to afford cash-value life insurance premiums and want to ensure their dependents are taken care of in the event of death. Your policy will cover a fixed "term" - usually one, five or ten years. Your premium payment and death benefits are only during that term. After the term you will have options to continue coverage and have the opportunity to convert to a cash-value life insurance policy.
There are different types of cheap whole life insurance. These include:
o Traditional,
o Interest-sensitive
o Single-premium whole life insurance policies.
Traditional whole life insurance: This policy gives you a guaranteed minimum rate of return on your cash value segment.
Interest-sensitive whole life insurance: This provides a variable rate on your cash value portion which is comparable to an adjustable rate mortgage. This gives you the flexibility with your cheap whole life insurance policy such as increasing your death benefit without increasing your premiums, depending on the economy.
Single-premium whole life insurance: This is great for individuals who have a large sum of money who would like to purchase their policy up front. This cheap whole life insurance policy also accrues tax-deferred cash value.