Types

Annual Renewable Term
This type of life insurance provides "pure" insurance, which means that if you die, the insurance company pays the death benefit. There is no cash or surrender value to the policy.

Premiums increase annually, while the death benefit remains level. When you quit paying the premium, the policy lapses.

Decreasing Term or Mortgage Insurance
Provides a decreasing death benefit and level premium for a specified period of time. It's designed to coincide with a mortgage amortization table, so that on the death of the insured, the death benefit provides a mortgage payoff.

Most professional agent no longer sell this coverage because of its high costs and decreasing death benefit.

Level Premium Term
This type of policy is "pure" insurance, which means that if you die, the insurance pays the death benefit. There is no cash value or surrender value to the policy. This type of term life provides a level death benefit and level premiums for the term that the insured purchases.

Generally the periods, that the premiums remain level are:

• 5 Years
• 10 Years
• 15 Years
• 20 Years
• 25 Years
• 30 Years
• 35 Years
• 40 Years

The longer the level premium period is, the higher the premium is.

After the policy goes beyond the selected level premium period, the policy premiums will increase yearly. Some insurance companies, allow you to requalify for another level premium period with a medical examination, at a higher level premium.

Universal Life / Variable Life
Designed to meet a person's everchanging lifestyle by offering flexibility in death benefit, premium payments, cash value withdrawals and sometimes cash value investment options.

Premium payments are not really premium payments, but contributions to the policy's internal cash value account. Premiums and expenses are then extracted from the internal cash value account.

Universal Life cash values are generally invested in the insurance company's investment portfolio. Insurance company directs investments.

Variable Life The policy cash value account can be invested in various mutual funds with different investment objectives. The insured directs the investments, and selects from an array of investment options.

Whole Life / Traditional Life
These types of policies are the mainstay of the life insurance industry. These types of policies are purchased as a permanent solution to an individuals final expenses, estate & income tax, and to pass on benefits to the insured's heirs.

Unlike Term Life insurance policies, where the policy is usually purchased to provide protection for a limited period of time, the Whole Life/Traditional Life policies are designed to provide protection for an insured's lifetime.

Many, if not most, whole life plans provide increasing cash values, pay dividends, and in some cases can be paid up, if the dividends and other benefits of the policy are sufficient to pay the annual premiums.

Whole Life policies can also be customized to fit a person's individual needs. For instance various riders can be added to accelerate the accumulation of cash value, or the policy can be designed to have an increasing death benefit. Joint insured rider are also available, which can be used for a number of different needs, such as estate conservation.