What are the different types of life insurance?

The different types of life insurance are:

  • Term Life. Term life is a contract to insure your life for only a specified period of time—usually 10, 15, 20, 25, or 30 years. It is the most affordable form of life insurance. The shorter the term of policy coverage, the lower the cost. Premiums are paid on a regular basis such as monthly, quarterly, or annually. If the policyholder dies during the specified period of coverage, the beneficiaries receive the amount of money specified in the policy contract.

At the end of the term coverage, the policyholder may be able to renew the policy for an additional term by paying more money. However, in order to renew the policy, the insurer may require a physical examination or ask that the insurer be provided with updated health information. If a cancer survivor has had a recurrence or another medical condition, the life insurance company may not be willing to renew the policy.

  • Universal Life. Universal life is a fairly new type of life insurance. It is also called permanent insurance because the price stays the same throughout the life of the policyholder. The policy cannot be cancelled as long as the required payments are made on time. There is some flexibility in that the policyholder may be allowed to pay less than the full amount and keep the insurance at a lower coverage level. In some cases, you may be able to increase the amount of insurance by paying more.
  • Guaranteed Issue Whole Life. Guaranteed life insurance is for people with severe health problems. It is not available in all states. Most insurers require that the policyholder be at least 40 years of age to purchase guaranteed issue whole life insurance. Most policies only offer up to a $25,000 death benefit. A policy is priced based on age and gender and is available to cancer survivors. It is expensive, and most policies do not pay a full death benefit if the policyholder dies in the first three to five years after the policy is purchased.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.