life insurance

Life insurance can be a great investment to prepare for the future and ensure your loved ones are covered if something happens to you. There are different categories of life insurance to take note of, such as term life, whole life, universal life, and final expense. In this guide, we’ll make a comparison of the four types we have listed.

Term Life

Term life insurance offers coverage for a specific period which may be up to 30 years. Like other types of life insurance, it has a death benefit. However, the death benefit works a little bit differently compared to other life insurance policies. If you die during your policy term, the insurer will pay the death benefit to your beneficiary, but if you die after the policy term has ended, the death benefit will not be paid out.

Keep in mind, though, that if your term life policy ends, some policies may have a renewal option when your coverage ends, while some may allow you to convert the plan to a permanent life policy. 

Term life policies also do not build cash value over time as permanent life insurance policies do. 

Whole Life

One example of a permanent policy is whole life insurance. This policy doesn’t expire like term life does. This means regardless of when you pass, your beneficiaries will receive the death benefit to help pay for any final expenses that need to be taken care of. Whole life policies can also provide enough of a death benefit that will keep your beneficiaries financially secured for years to come.

These policies also build cash value over time. You, as the policyholder, can borrow or withdraw from the cash value to take care of certain expenses.

Universal Life

Universal life insurance is another permanent policy that doesn’t expire but lasts for as long as you keep up with your premiums. Like whole life plans, universal life insurance builds a cash value. However, the earnings are based on a money market interest rate. 

Universal life plans typically have low premiums and death benefits that are adjustable.

Final Expense

Final expense insurance is also known as burial insurance and is a type of whole life insurance. It is meant to cover end-of-life expenses such as funeral expenses and other costs. Because of this, final expense insurance plans typically have a lower death benefit compared to other life insurance policies. 

Many people choose to go with a final expense policy because they cannot qualify for a traditional life insurance policy due to poor health or old age. When purchasing a final expense plan, you do not need to undergo a medical exam or provide medical records. If you do not have any other life insurance policy, you might benefit from purchasing a final expense plan.

Do you still have questions about your life insurance options? Give Remco Insurance Services a call today, and we will provide you with the answers you need!