Comparing Types of Life Insurance

When you begin looking for life insurance, it can be difficult to decide which type is the best choice for you and your family. It can be confusing whether you’re trying to understand what permanent life insurance is or attempting to tell the difference between term vs whole life insurance. At Venture First Advisory, we offer many types of life insurance and know how to select the best option for you. Here is our easy guide to figuring out the difference between different types of life insurance.

Term Life Insurance

Term life insurance provides you with a set amount of life insurance coverage for a predetermined amount of time. You can select a term that ranges anywhere from 10 to 45 years. Generally, these policies expire when you reach the age of 85.

One of the benefits of term life insurance is the price factor; it is inexpensive, providing an affordable way to cover your family in case of death. Because it is so accessible, it is a popular choice for many people.

Term life insurance only lasts until you reach the end of your term, at which point there may be the option to renew at a higher price or switch it to a permanent life insurance policy. You won’t get any cash back after your term runs out.  If you are looking for a life insurance policy with investment value, a term life insurance policy may not be the right choice for you.

Consider choosing term life insurance if:  You have a lower income or your priority is protecting yourself and your family in case of emergency. Young people and families usually find that term life insurance is the better option for them and suits their needs for the right price.

 

Permanent Life Insurance

There are a few ways that permanent life insurance varies from term life insurance. The first is that it covers you for your whole life, not just within a certain time period. Premiums for permanent life insurance are often higher because there is sometimes an investment component to this type of insurance. Part of the amount you pay covers your life insurance, while the other part is put into an investment fund. This cash value will be paid out to you if you decide to cancel.

There are three common types of permanent life insurance – Term 100, Whole Life, and Universal – which each have their own unique benefits.

Term 100

Term 100 life insurance is more similar to traditional term life insurance than the other types of permanent insurance. It offers a less expensive premium but covers you for your entire life; should you live past the age of 100, you are still covered but do not have to pay. The lower cost of term 100 life insurance is due to the fact that there is no investment component, meaning that you will not have any cash paid out should you decide to cancel.

Consider Term 100 insurance if: You want basic, well-priced life insurance coverage for your entire lifetime.

Whole Life Insurance

Much as the name suggests, whole life insurance covers you for your entire life. Whole Life Insurance does have a higher premium, due to the investment component. You can get this cash investment paid out either through receiving dividends each year or elect to have it paid out when you need it.

Whole Life Insurance policies have a fixed premium; this means that you will pay the same amount throughout your entire coverage period.

Consider Whole Life Insurance if: You have valuable assets that will be left behind after your passing, such as an estate that needs taxes paid, that you would like a guaranteed fund to be able to pay for.

Universal Life Insurance

Universal Life Insurance is very similar to Whole Life Insurance. The major difference lies in the ability to select your own investments. Universal Life premiums are more flexible, with the option to reduce the premium paid by using some of your built-up cash value should you choose to use it for this purpose.

Consider Universal Life Insurance if: You want to build up investments like one would with Whole Life insurance, but with the option of flexibility and ability to change these investments according to your preference and risk tolerance.

Every type of life insurance policy can be a great choice – it simply depends on finding that one that meets your needs effectively. At Venture First Advisory, we always make sure to find the right policy from the right provider that suits exactly what you’re looking for. Book an appointment with Venture First Advisory today to speak to one of our experienced advisors and get the coverage that you need from people that you can trust.