An Overview of Different Life Insurance Options

The life insurance you purchase today determines your dependents' quality of life after your death. Therefore, before buying life coverage, you should understand what you need. Life insurance agencies primarily offer three types of life insurance. These categories are term, permanent and universal life insurance.

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Let us look at each in detail. Term life insurance covers you for several years before it expires. If you die within the time frame of your term insurance, your beneficiaries are given death benefits from your premiums. The benefit can be taken as an annuity or a lump sum. As the name suggests, permanent life insurance covers the owner's whole life. Unlike term life insurance, permanent insurance covers endowments such as real estate that can support dependents such as children their entire lives. Universal life insurance also has a cash value, but the premiums also go towards death benefits. However, unlike permanent life insurance, universal life insurance allows customers to decrease or increase the value of their premiums. Reducing the cost of premiums decreases the policy cash value and vice versa.