Life insurance policy refers to a contract between an individual and an insurance company. The individual will make regular premium payments and the insurance company will pay a lump sum payment to the beneficiaries upon the demise of the individual. An individual who wants to get life insurance will make a choice based on their goals and needs. There are different types of life insurance that include;
Term life insurance
One can take term life insurance but it is for a specified duration such as 10 or 20 years. During this period the premium paid will be constant. After the specified period, there is the option for continued coverage but for a larger premium. The proceeds received from term life insurance can be used to meet certain goals such as paying the mortgage and paying college fees.
Universal life insurance
Universal life insurance is designed so it can provide an individual with lifetime coverage. The premiums paid under universal life insurance are flexible unlike whole life insurance because an individual can choose to raise or lower the premium depending on their capabilities. The premiums for universal life insurance are much higher compared to term insurance because it covers one’s entire life. Universal life insurance can be used as part of one's strategy for estate planning to ensure they transfer wealth to their beneficiaries.
Whole life insurance
Whole life insurance and universal insurance are similar in that they offer lifetime coverage period. However, the premiums under whole life insurance are fixed, unlike universal life insurance. Insurance. Whole life insurance works similar to savings because it has a cash value that continues to accumulate over a period of time. Just like universal life insurance, whole life insurance can be used for estate planning and can be used to transfer wealth to ones beneficiaries after their demise.
When deciding which life insurance policy from Jones Insurance Agency in Illinois, it is wise to compare the different policies before deciding.
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