Term Life Insurance – Cost and Coverage

Term Life Insurance is the most affordable type of Life Insurance in the market. If you are working on a small budget, then perhaps you may choose to start with this type of coverage. As the name implies, Term Life offers protection for only a limited “term” or period. When the term ends, you can choose to renew the plan or switch to a Permanent Life Insurance.
Renewal of the plan does not mean that your premium cost will remain the same. After ten years, the cost of premium may have increased so your rates will also be adjusted.

Cash Value Life Insurance – Cost and Coverage

A Cash Value Life insurance is also called Permanent Insurance or Lifetime Insurance. Obviously, it offers lifetime protection for the policy holder. What’s good about it is that your premium costs will never increase. Although the rates may start out high, your payments are bound to decrease over time. As long as you are able to keep up with your payments, you can enjoy continues coverage.

Some people cannot afford to buy a Cash Value Insurance because the costs can range up to 10 times higher than costs of Term Life. Why such a big difference, you may ask? Aside from the lifetime protection, the policy holder can expect a “cash value” after a certain period of time.

The plan holder can also take out a loan against the policy. The amount of loan plus interest will be taken out from your insurance benefits which mean that in case of death, the beneficiaries will receive a lower payout.

There are four variations of a Cash Value Life Insurance. These are Whole Life, Universal or Adjustable, Variable and Variable Universal Life. A Whole life insurance is the typical plan which offers a guaranteed cash value with a definite premium cost. Universal Life, Variable and Variable Universal Life offers more flexible repayment terms with slight differences on the conditions and benefits. Be sure to ask a life insurance specialist about the specific rules and limitations that apply to each of these variations.