Life insurance policy in united states

 

Life insurance policy in united states

1. Term Life Insurance:

• Coverage Period: Provides coverage for a spec
  ific period, such as 10, 20, or 30 years.
• Death Benefit: Pays a benefit to the beneficiaries if the insured passes away during the term of the policy.
• No Cash Value: Generally does not accumulate cash value over time.

2. Whole Life Insurance:

• Lifetime Coverage: Provides coverage for the entire life of the insured.
• Cash Value: Builds cash value over time that can be borrowed against or withdrawn.
• Level Premiums: Premiums remain constant throughout the life of the policy.

3. Universal Life Insurance:

• Flexible Premiums: Allows for flexible premium payments and offers some control over the death benefit and cash value accumulation.
• Cash Value Component: Accumulates cash value that earns interest over time.
• Adjustable Death Benefit: Provides the option to adjust the death benefit amount.

4. Variable Life Insurance:

• Investment Component: Allows the policyholder to allocate premiums to various investment options (e.g., stocks, bonds, mutual funds).
• Cash Value Linked to Investments: Cash value and death benefit can vary based on the performance of the chosen investments.

Key Features:

• Death Benefit: Lump-sum payment to beneficiaries upon the death of the insured.
• Premiums: Regular payments required to keep the policy active.
• Beneficiaries: Individuals or entities named to receive the death benefit.
• Riders: Additional features that can be added to a policy for extra coverage (e.g., accelerated death benefit, waiver of premium).