The principal types of life insurance......

 The principal types of life insurance......

There are two most important types of life insurance—term and whole life. Whole life is from time to time called permanent life insurance, and it encompasses several subcategories, including traditional whole life, universal life, variable life and variable worldwide life. In 2003, about 6.4 million human being life insurance policies bought were term and about 7.1 million were whole life.

Life insurance products for groups are diverse from life insurance sold to persons. The information underneath focuses on life insurance sold to persons.

Term.....

Term : Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.
There are two basic types of term life insurance policies—level term and decreasing term.
Level term means that the death benefit stays the same throughout the duration of the policy.
Lessening term means that the bereavement benefit drops, usually in one-year increments, over the course of the policy’s term.
In 2003, virtually all (97 percent) of the term life insurance bought was level term.

Whole Life/Permanent

Whole Life Or Permanent : Whole life or permanent insurance pays a death benefit whenever you die—even if you live to 100! There are three major types of whole life or permanent life insurance—customary whole life, universal life, and variable universal life, and there are variation within each type.
In the case of usual whole life, both the death advantage and the premium are intended to stay the same (level) all through the life of the policy. The cost per $1,000 of benefit increases as the insured human being ages, and it clearly gets very high when the insured lives to 80 and beyond. The insurance company could charge a premium that increases each year, but that would make it very hard for most people to afford life insurance at advanced ages. So the company keeps the premium level by charging a premium that, in the early years, is higher than what’s wanted to pay claims . Investing that money, and then using it to complement the level premium to help pay the cost of life insurance for older people.
By law, when these “overpayments” reach a certain amount, they must be obtainable to the policyholder as a cash value if he or she decides not to continue with the innovative plan. The cash value is an option, not an supplementary, benefit under the policy.

In the 1970s and 1980s, life insurance company introduced two variation on the conventional whole life product—universal life insurance and changeable worldwide life insurance.