Different Types of Life Insurance Policies

If you haven’t thought about getting life insurance before, there is no better time than the present to learn more about why you need it and how to put a policy in place. For your peace of mind, and your family’s financial security, getting a life insurance policy can be one of the smartest decisions you ever make.

Types of Policies

There are several different types of policies you can consider, and each insurance company offers a variety of options to meet your needs. The rates will vary by company, and can even be influenced by your weight, whether you smoke, or whether you frequently like to go skydiving. But don’t let these variables scare you away from getting proper coverage; they are all just part of the overall picture in helping insurance companies gauge how risky a lifestyle you may be living.

There are two main ways to get life insurance: on a group or individual basis. Group policies are usually available through an employer, where your company has chosen the carrier from who all the employees will get their policies. When it comes to the individual route, however, you are in charge, and you can set up your own policy with the provider of your choice.

When you shop around for life insurance policy quotes, keep the following types in mind:

Term life insurance – This policy is put in place for a specific amount of time. You may have children and want to ensure that they will be taken care of if something happens to you while they are young, so you put a time limit on the policy. Term policies are usually offered for up to 30 years. They may be level, which pays out the full benefit regardless of how long you have had the policy, or they may be decreasing, with the benefit amount varying, based on when in the course of the policy you die. The Insurance Information Institute (III), reports that the most popular type of policy is a 20-year term.

Permanent life insurance – This type of policy is put in place for as long as you live. Because of this, it usually has higher rates than term policies do. It could also become a route for borrowing money, as some allow you to do. Permanent policies pay the full benefit amount, regardless of when you die.

Getting Covered

To be sure that you have gotten enough life insurance coverage, determine how much income your family would need to survive until they can live without your income. If you think that will take one or two years, then figure what your total monetary contribution is, over that time.

Start by gathering quotes, to see what each insurance company offers, but don’t put off getting a policy in place any longer. This is one less thing that you, and your family, will need to worry about, should something happen.