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Life Insurance Coverage |
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Term Life Insurance Term life insurance is the least expensive life insurance to purchase. As its title implies, it is insurance coverage that expires when the set term is over. It is temporary coverage, but many term life policies are renewable and some are convertible to permanent policies. You may purchase term life insurance for one, five, 10, or 20 years, or even longer. Term life insurance protection pays a predetermined sum to the beneficiary if the insured dies during a specified period of time (the term). So, if the insured purchases a policy with a $250,000 face value, the beneficiary will receive the predetermined sum of $250,000 upon the death of the insured. In summary, term life insurance is a low cost, temporary insurance plan. It may be renewable, and it may be convertible to a permanent life insurance. Permanent Life Insurance There are three types of permanent life insurance: whole life, universal life, and variable life. Permanent life insurance provides lifetime insurance protection, which does not expire. Premiums for permanent life insurance are higher than those of term insurance because most permanent policies offer savings or investment options combined with the insurance coverage. The savings options allow the policy owner to build cash value within the policy which can be borrowed or distributed at some time in the future. Whole life insurance pays a stated amount to the beneficiary upon death of the insured, but also accumulates a cash value that the insured can withdraw or borrow against. Whole life insurance is a contract with level premiums. Universal life insurance is a more flexible permanent life insurance and costs less than whole life insurance. Like whole life, it also has an investment factor that provides a cash value. But unlike whole life insurance, it can be reviewed and altered and the premiums are variable. Variable life insurance is usually the most expensive type of permanent life insurance. It allows the insured to allocate a portion of their premium dollars to various investment funds such as stocks, bonds, equity funds, and money market funds. Because of investment risks, most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum. Below is a list of ten largest publicly traded life and health insurance companies:
MetLife Inc. |