Although life insurance sounds like an easy topic, it's slightly more complex than you'd initially think. "Life insurance" is the umbrella term for several different types of life insurance that you need to understand. If you're looking into getting life insurance for yourself or a loved one, we'll talk you through three of the main types of insurance you'll come across on your search for the best plan for you.

The Three Main Types of Life Insurance

1. Term Life Insurance

Term life insurance is a highly affordable form of life insurance. It's not sold over your entire life but in shorter terms. The shortest term you'll usually find is five years, with the longest usually being 30 years. Every term life insurance policy is different, but on a good plan, you can get millions in coverage. The best plans on a "level premium" ensure you pay the same rate throughout your life, too, so there are no unexpected price increases.

There are shorter terms in term life insurance too, but this is known as annual renewable life insurance. This is where your policy only lasts a year but you can manually renew it each year. If you only need short-term coverage then this type of life insurance is fantastic. Though keep in mind, with both types of term life insurance your loved ones don't receive a payout if you outlive the term.

2. Whole Life Insurance

This type of insurance is better for your beneficiaries as they're guaranteed a payout. The coverage lasts until death, but you'll have to make sure you pay the premiums. Don't worry - the premiums are nothing extreme and rarely change throughout your life. This is the type of life insurance you can set up as a monthly direct debit payment and forget about. It's a little pricy but you're guaranteed a rate of return at the end of your policy.

3. Guaranteed Universal Life Insurance

With this type of life insurance, your premiums never change but there's not much cash value within this insurance type. There's still a good payout, and you can set the age you want it guaranteed, with a high age like 90+ being a smart choice. How it works is you pay the insurance on time every time, or else you lose all the money you've put in up until your missed payment. You could lose decades of payments after one missed payment, so be very careful.

As this type of insurance is inexpensive compared to the others it shouldn't be too difficult to make all your payments. If you manage to pay on time every time your loved ones and beneficiaries are looking at a nice payout when the time comes. They'll usually receive the sum of what you paid in over your life, though it varies by the policy.

Life insurance is an incredibly important part of life - as are all insurance types. Contact us at Society Insurance Network and see what we offer for business insurance, personal assets coverage, and more. We'll get you the best coverage for your business so you can stay safe in all aspects of life.

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