Term Life Insurance
Term life insurance is the most common and most purchased type of life insurance because purchasers can receive the highest coverage amounts for the lowest premium price, as compared to other types of life insurance. Term life insurance death benefit coverage can range from several thousand dollars into the millions of dollars. Term lengths generally come in fixed premium lengths of 10 years, 15 years, 20 years, 25 years and 30 years fixed premium periods. The death benefit of a term life insurance policy is payable to a beneficiary, if the insured dies during the term period. There is no death benefit payout if the insured outlives the term period. If the insured outlives the policy term, the policy simply expires. There is no cash build up in a term policy. Another variation of term, known as non-med term insurance, is available for those that want to avoid waiting for coverage or undergoing a medical examination.
Non Medical Exam Term Life Insurance
Non-medical exam term life insurance is still the same as regular term life insurance; however it does not require the insured to go through a medical examination. Non-medical term life insurance policies products are usually issued quicker than traditional term life insurance due to the lack of various medical information and history required. Non-med life insurance policies will generally cost a little more than regular term life, but with the added convenience of quick issue time and not having to undergo a medical exams. Non-medical exam term life insurance policies generally have a limit on the amount of death benefit that can be applied for.
Universal Life Insurance (Permanent / Guaranteed)
Guaranteed universal life insurance is similar to whole life insurance in that it covers the insured person for their entire life. The premium of a guaranteed universal life insurance policy is fixed and will not change provided the life insurance premiums are paid when due and the face amount remains the same. Guaranteed universal life insurance policies can sometimes accumulate a tax-deferred cash value. The cash value is accessible to borrow against or withdraw from to cover unexpected life expenses. Universal life insurance differs from whole life in that it allows more flexibility. Policyholders can change the death benefit amount and premium payments as desired.