There are several types of life insurance and each of them surely has different benefits. These different types of life insurance aim to serve various needs, capability, and the public’s purchasing power. If you want to get a life insurance, you may want to be familiar with all the different types that are available first.
Term Life Insurance
Term life insurance serves to give protection towards the one insured for only a certain amount of time, hence its name. Usually, this type of life insurance offers a contract for 5, 10, or 20 years, with a fixed premium that can be considered as cheap.
You are recommended to choose this type of insurance if you prioritize the future of your family, especially education for your children. This type of insurance also fits those of you who need a lot of insurance money but have limited financial abilities.
If you choose this type of insurance, as the policyholder you will have the freedom to set the amount of premium according to your capabilities.The coverage that you can get as a policy, however, can reach tens of thousands of dollars. This means, if the one insured passes away when the contract is still active, then the insured family will get quite a lot of insurance money.
However, the disadvantage of this type of insurance is that the one that is insured may lose the money they have paid as insurance premium or the premium goes to waste as soon as the contract finishes if they do not experience any health problems or passes away until the contract is over.
Whole Life Insurance
The whole life insurance gives protection for one’s lifetime, even though insurance companies usually limit the benefit of the insurance to last for only up to 100 years. This type of insurance is recommended for those of you who do not have anyone dependent on you and you want more benefits than just compensation for death, or you are interested in the idea of a long-term saving. Therefore, if you want a life protection as well as a saving for emergency needs such as paying hospital fees, you can consider getting this type of insurance policy.
The advantages of getting this type of insurance are that the policyholder can get the cash value of the premium that they have paid. If you as the one insured cannot pay the premium regularly, you can use the cash value of the premium that you have paid to pay for the next premium. The insurance premium that you have paid will not expire if there is no claim. When the contract is over, the insurance money will be given wholly.
However, the disadvantages are that the premium is larger than the term life insurance, even up to a double. The reason for it is the high chances of insurance claim before the term of protection is over. The cash value of the total premium that has been paid is not too big because the interest rate for this type of life insurance is usually low.
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