There are many different types of life insurance policies available for those who need different coverages. The three most common life insurance policies are:
Whole Life Insurance
Whole life insurance policies, also known as permanent life insurance policies, are perhaps the most common types of life insurance policies. Whole life insurance covers the policyholder until they die or until they cancel the policy.
Term Life Insurance
A term life insurance policy covers the policyholder for a certain period of time as determined by the policy. Common terms for term life insurance include 10 years, 20 years, 30 years, etc. This insurance is useful for policyholders who simply want a life insurance policy until they have paid off a debt. For example, you may purchase a 10-year term life insurance policy if you expect to pay off your mortgage in nine years.
Universal Life Insurance
Universal life insurance is a type of whole life insurance policy that allows you to withdraw money at cash value while the policy is active. Excess premium payments can be credited to cash value, which in turn may pay you back each month.