For some people, especially those with no dependents and few late-in-life worries or debts, term life insurance is a good choice. It expires after a set period of time. Their out the money spent, but hey, it was there, just in case. For those with dependents, debt, etc., permanent life insurance might be the better choice. After all, it never expires, is there whenever you need it and some also build a cash value that you can borrow against, with the option to pay it back or not. However, permanent life insurance is not that cut and dry. There are different types of permanent life insurance policies. You’ll want to know your options before making your final decision.
Whole Life
Whole life is probably the most common and most popular type of permanent life insurance. It is considered a great retirement investment. While the premiums are somewhat higher than that of term life insurance, whole life does not expire, often gives greater benefits, such as a dividend option which returns any over-payments to you, as well as building a cash value.
Universal Life
Universal life is comparable to whole life, but comes with its own set of benefits and advantages. Universal policies are also often called adjustable life insurance. They build the same kind of cash value as whole life insurance, however, universal gives you the option to borrow against that cash value. It is flexible and you might even be able to pay smaller premium, should your cash value cover the difference in costs. These loans do not come without their terms and conditions, so be sure to read the details. However, one loophole is that you might not have to pay it back. The only downfall is you loose the amount of cash taken out in overall benefits. So be careful. You could lose your entire policy altogether if you withdraw too much money without returning at least some of it.
Variable Life
Variable life insurance is like the stock market of the life insurance game. Not only does it offer death benefits to your loved ones when you are gone, it has a bevy of investment options for you to choose from, which will be managed just like regular stock would. You can use your cash value to invest for greater returns. Is it risky? Perhaps. You will certainly want to invest in stable options, though nothing is predictable, and have a professional guide you through the process so you don’t lose much and hopefully gain a lot more. Of course, variable policies also allow you to borrow against the cash value under the same terms as universal policies; another excellent benefit, should you need it.
Variable Universal
This option is pretty much a compilation of all the other options. It gives you the same kind of investment options, builds cash value and also will allow you to pay lower premiums once you have enough cash value built up to help cover the difference.
There is not a great deal of difference in these policies, however, there is enough difference to encourage you to look closely and choose the option that best suits you, your family and your lifestyle.
