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Other Types of Policies

Every family is different, and will have different needs when it comes to life insurance. Fortunately, there are a multitude of plans out there for you to choose from. We can help you find the best one for your family. Here you can review the different policies available. Then determine how much coverage you will need.

Term Policies

Term life insurance, also referred to as "pure insurance coverage", is based on set year plans. You only buy enough for a given amount of time. These more affordable plans can be great if you only want to buy a small out of coverage. Term life plans are good to buy if you are not sure what your needs will be, and suspect that they might change. You can also buy renewable term policies, so that even if you have a short term plan, when it expires you can renew it and continue coverage. Another option with this type of policy is return of premium term coverage, so that if you survived your term plan, you can get the premiums you paid back.

Whole Life Policies

This policy provides permanent coverage. While it can be more expensive than term coverage, you are guaranteed to be insured for the rest of your life and will pay a fixed amount. With term life, your premiums may go up from year to year. Whole life policies also have an investment component that allows you to build up money and withdraw or borrow that money when you need it.

Universal, variable, and universal variable are all variations of the whole life plan.

Universal Coverage

This is a variation of whole life. Like whole life, it offers permanent coverage until the day you die; however, universal plans have flexible premiums. With this cash value plan, you can use the interest on your savings to pay premiums and can shift money between the insurance and savings elements of your policy.

Variable Coverage

Another form of whole life insurance, variable life also provides permanent coverage. It offers a fixed premium payment, but then you can invest your premiums into a portfolio of options. With separate accounts, you can invest part of the plan into stocks, bonds, or equity funds. Your agent will help you go through your options and find the best investments that fit your needs.

Because you can invest, your death benefit and cash value will fluctuate based on the performance of the investments you chose. This makes variable life somewhat risky, but most plans have a minimum that the death benefit cannot fall under.

You can use the interest earned from your investments on your premiums to reduce them. However, if your investments do poorly, you may have higher premiums. And, while you can use your investments to lower your premiums, you cannot withdraw cash within your lifetime. Variable life is also considered a securities contract.

Variable Universal Coverage

This type of policy, also referred to as "VUL" or "flexible premium variable life insurance", is also a cash value policy. Policy holders have separate accounts and, like a variable life policy, can invest in stocks, bonds and mutual funds.

Variable Universal plans have the same type of risk as variable - the cash value can fluctuate based on your investments, and so your death benefits may decrease. There is a minimum death benefit, but you may have to pay extra premiums to ensure this.

Unlike variable life policies, you can borrow against the cash value of your policy, but you have to be careful as it takes away from your death benefit. The "variable" part refers to the fact that the holder can invest parts of their premium, so the cash value will vary, and the "universal" part refers to the fact that the premium is flexible.