www american family insurance com

www american family insurance com
If you are considering purchasing life insurance, an overview of the available types should prove helpful. This article will briefly discuss the difference between whole and term life insurance, as well as some variations on whole life insurance.

The easiest way to make the difference between life insurance and term life insurance is to look at what happens to their names. When buying whole life insurance that you need for your "whole" life - as long as the policy, there will be a benefit when you die. What is this service depends on the value of at the time of her death, but You can make the policy even if you are no longer the payments. Whole life also accumulates a cash value on a tax-deferred basis. Moreover, the whole life dividends throughout the life of the policy.

Term life insurance, on the other hand, is purchased for a certain term or period. As long as the you within that period, term life insurance wants to pay agreed upon amount to your beneficiaries. It will not be paid if you are not willing to pay more or, if you are after has expired. In addition, the duration of the life insurance has no cash value.

Two other aspects of the whole period, compared to life should be pointed out. The first aspect is that the premiums for whole life insurance to start higher, but over time should remain constant. On the other hand, premiums for term life insurance are lower near the beginning of the political, but increase over time. Another aspect is that you can borrow against the cash value of a whole life insurance. This is not possible to use the term life insurance because they do not have a cash value. There are two types of whole life insurance that need to be mentioned. The first is a flexible form of whole of the universal life insurance. With universal life insurance, you can adjust (within certain limits) the premiums as well as the benefit amount over time to suit your financial situation. This is made possible by the premiums in a fund that is based on the interest rate. As with ordinary life insurance, this type of policy has a cash value that can be borrowed against.

The second variant is called whole life insurance variable life insurance. This type is similar to universal life insurance, except that the premiums into the fund are in the financial markets and not on interest rates. While the potential for growth is greater with this type of insurance, the potential for loss is greater as well.

As you can see, there are a few choices when buying a life insurance policy. Now would be a good time to some of the other resources on this page to decide on the life insurance policy that is right for you and your family.

Mike Bell is the webmaster of http://www.InsuranceOptionsGuide.com, a resource for life and health insurance answers.