Life Insurance

The most common type of life insurance policy is called a term life insurance policy. This is the cheapest and most basic of its kind. A term life policy simply has one function, and that is to pay out a contracted sum of money following the death of the insured. Both the death benefit and the policy limit are same.

There are 5 main categories of life insurance from which to choose from. Of the 5, term life is the only one that doesn't include what is referred to as a 'cash value account' in addition to the death benefit. The 4 cash value life insurance policies are as follows:

• Whole Life
• Variable Life
• Universal Life
• Universal Variable Life

A whole life policy provides permanent coverage for the insured whilst simultaneously generating a cash value account. One problem with the cash value account associated with whole life insurance is that it is controlled and regulated by your insurance provider. That is to say, they invest it where they see fit.

A variable life policy is like a whole life policy with the exception that it affords the insured a greater amount of policy flexibility. You are allowed access to the funds if you need to borrow against the policy for whatever reason.

Both universal life and universal variable life offer a greater degree of access and flexibility to their cash value accounts than either a whole life or variable life policy. (With a universal variable life insurance policy, the insured has the greatest amount of control over their cash value account)

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