Here at Saxton Law Firm, we deal with a lot of life insurance policies. We help clients establish life insurance policies. We help clients file life insurance claims. We help clients appeal denied life insurance claims. We want to help our clients every step of the way – from A to Z – and we want to help you. Many families want to know – what are the different types of life insurance policies? We can help answer your life insurance questions here at Saxton Law Firm in Kansas City, MO.
What Life Insurance Policy is the Right Choice for You in Kansas City?
When you decide to purchase a life insurance policy, it is important to know where to start and there are two basic types of life insurance policies – Term Life Insurance and Permanent Life Insurance. Your life insurance policy can be tailored to fit your needs and each type of policy has its own set of benefits.
Here is a quick look at the basics of term and permanent life insurance policies.
What Is Term Life Insurance?
Term life insurance provides coverage for a set number of years and will pay out a death benefit as long as the policy is current and premiums have been paid. A benefit of term life insurance policies include more affordable premiums and a rate that remains the same for the entire term of the policy. When the term expires, you may have the option to renew your policy at an updated rate – but term life insurance policies can usually only be renewed year-to-year. Your term life insurance policy may also give you the option to convert to whole life insurance at the end of the term.
What Is Permanent Life Insurance?
A permanent life insurance policy is for the remainder of your lifetime and there are four basic types of permanent life insurance – whole life insurance, universal life insurance, variable life insurance and final expense life insurance. A whole life insurance policy provides coverage for your lifetime and will pay a death benefit no matter when you pass away – as long as premiums are paid. Whole life insurance adds a savings aspect, where a part of your premium is paid into a savings account.
Universal life insurance provides lifetime coverage with paid premiums and allows you to adjust the death benefit for the life of the policy. Interest rates for universal life insurance policies are not fixed. Variable life insurance is a different option that has two aspects – a face value death benefit and a variable cash value that will move up and down based on your premium payments and select investments. This type of policy can provide a greater benefit over time, but comes with more risk, higher fees and higher costs. Final expense life insurance is a policy that is created for a specific reason – to pay for funeral and burial costs.
Comparison Table of Different Types of Life Insurance Policies
| Type of Life Insurance Policy | Term Life Insurance | Whole Life Insurance | Universal Life Insurance | Variable Life Insurance | Final Expense Life Insurance |
|---|---|---|---|---|---|
| What Is the Length of Coverage? | Varies – 10, 15, 20, 30 Years | Lifetime | Lifetime | Lifetime | Lifetime |
| Does it Add Cash Value? | No | Yes | Yes | Yes | Yes |
| Is a Medical Exam Required? | Varies by Policy | Yes | Yes | Yes | No |
| Standard Amount of Death Benefit | $100,000 or More | $50,000 or More | $50,000 or More | $50,000 or More | $2,500 – $35,000 |
READ MORE: Which Insurance Companies Deny the Most Claims?
Do you have questions about your current life insurance policy? Are you faced with a denied life insurance claim? No matter what step you are at in the life insurance policy process, Saxton Law Firm is here to help. We are here to help answer questions like – what are the different types of life insurance policies – and many more. Contact Saxton Law Firm today for a FREE case review!