Life Insurance – What Types are Available?

Individuals have several options when it comes to selecting the life insurance that is best for their personal needs.  Essentially, life insurance is divided into two different categories.  The first category of life insurance is known as term life insurance.  Term life insurance is also known as temporary life insurance.  The second category of life insurance is known as permanent life insurance, which is also known as lifetime insurance or protection.

Each of the two categories is different is several ways.  Term and permanent life insurance are different in terms of their individual death benefit, length of coverage, premiums, overall cash value, and the over cost of the insurance.

In terms of death benefits, term life insurance will be able to provide a death benefit for as long as the policyholder is alive.  To the contrary, term life insurance will provide a death benefit only for a certain period of time.  

Term and permanent life insurance are also different in terms of the length of the coverage that they provide to their policyholders.  Individuals who might need a longer period of coverage might want to consider taking on permanent life insurance.  Term life insurance might be beneficial for individuals who are looking for more short-term coverage.

Individuals in large cities like Seattle, Washington might use the money from permanent life insurance to pay off bills, funeral expenses, or even to help pay for estate taxes.  Short-term life insurance might be used for more pressing needs like paying off a home loan or an auto loan.

When it comes to the premium associated with each of the two types of life insurances, it is important for policyholders to understand that the premiums associated with permanent life insurance generally stay the same over the course of the policyholder's life.  In comparison, term life insurance premiums tend to go up over time.  Additionally, these premiums are paid only for a specific time.  When this term ends, the premiums tend to go up every time they are renewed.

The cash value for each of the two types of life insurance is also different.  This is the case whether a person is living in Seattle or New York.  Permanent life insurance builds up cash value overtime, while term life insurance does not build up cash value over time.  For permanent life insurance, the increase in cash value is typically not taxed, and policyholders are actually able to take out loans against the cash value.

The final factor for policyholders to consider is the overall cost of the insurance policy.  Individuals living in Seattle may pay less than individuals living in Los Angeles or New York, for several reasons.  

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