Term life insurance provides “pure” protection or coverage for a specified period of time. If in case you die within the time period defined in the policy, the insurance company will pay your beneficiaries the face value of your policy. If nothing happens to you after the term period, your coverage ends, and you get nothing back.
A term insurance is right for you if you are looking for a high cover amount at low premium payments, also if you cannot afford to invest in a whole life or endowment plan.
A sample of a term insurance is Sun Life Assure.
Whole life or Permanent life insurance provides coverage for your whole life or until age 100. It offers permanent protection (face amount) at affordable premium value and living benefits (cash value and dividends). It requires you, however, to pay or your entire life.
The amount of death benefit is the sum of face amount plus accumulated cash values and dividends. The cash values and dividends are guaranteed and can be used for your financial goals while you are living. Such can be to fund college education of children or retirement. When you get all such benefits, the policy terminates and you are no longer insured.
Endowment Life Insurance provides coverage for a limited period. Since they grow cash values very fast, they can build a future fund for a definite purpose – retirement, college education of a child or other financial goal. It also provides dividends (but not guaranteed). Just like a whole life, the amount of death benefit is the sum of f ace amount plus accumulated cash values and dividends. The policy ceases upon endowment or death of the insured.
This is right plan for you if you are looking for shorter terms to fulfill your financial goals and looking forward to securing the future of dependents.
A Variable Life Insurance product is simply an insurance plan with investment in mutual funds. Part of the premium amount paid is invested by professional fund managers into market-linked instruments such as stocks of companies, government securities or bonds, etc.
VUL is one of the most popular in life insurance segment because of the investment component.
Choosing the best plan can be difficult if you do it alone. Talking to a financial advisor is free, and they can help you decide which plan to take for you to achieve your goals.
During the discussion, a financial advisor can provide you a more specific information regarding the plan that interests you the most.