Types of Life Insurance Policies

There are two main types of life insurance policies that you will need to consider— term and whole life insurance. Both have their own benefits based on when you purchase the plan and how long you own the plan. We’ll explore the main differences here. If you have any questions on either life insurance policy, feel free to contact us!

Whole Life Insurance

Whole life insurance policies are permanent policies once you have purchased them. The come with the following features and benefits:

R

Premium is fixed at the original rate, never increases.

R

Has a living benefit

Tax-sheltered cash account that builds up during the life of the policy.

R

Has a death benefit

This policy can be converted to whole life

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Buyers can supplement their policy with benefit riders

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Pays out divides that can be used to reduce premiums or can be added to the cash value of the policy.

Term Life Insurance

Term life insurance starts out as the cheeper option of the two. However over time as the premium’s increase, they become more expensive than a whole life plan. The following are the features and benefits of a term life insurance policy:

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Premium starts out low, increases in increments.

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Has a death benefit

The policy pays out to all beneficiaries only once the owner of the policy passes

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Owner has the option to transition their term life policy to a whole life policy once the policy expires

Determining whether you’re fit for term or whole life insurance coverage all depends on your financial situation, outlook, and the age of the person you plan to insure. We’ll help you determine the appropriate policy that gets you the appropriate coverage at a rate that you can afford.

Just contact Hedstrom & Associates for more information.

We match you with a plan you’ll love!

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