Money Basics

Which Life Insurance Should I Choose: Different Types Of Insurances

People who buy cars usually gets a car insurance. The same goes with people who buys a house. So, since you are alive, it only makes sense that you should get life insurance as well. However due to the different kinds of life insurance that we have in the industry today, it can be pretty hard to decide which of them you should get. After all, not every one these days are fully aware of how important life insurance really is. The best way to learn more about the best life insurance for you is to educate yourself with regards to various types of life insurance available.

  1. Term Life Insurance

This is one of the simplest life insurances out there. It also happens to be one of the most popular for the reason that it is much more affordable compared to most life insurance. Apart from that, there isn’t a lot of technical terms used in the introduction phase. That’s because term life insurance only focuses on one thing: pays the people who choose as your beneficiary whether it be your spouse, children, parents, or siblings. Basically, if you are worrying about how your loved ones are going to cope by the time that you are gone then term life insurance is most certainly the right option for you.

  1. Permanent Life Insurance

Compared to term life insurance, this one is a bit more complicated. That’s because permanent life insurance focuses on attaining two things at once. For one thing, it will provide money to your beneficiaries by the time that you are gone. On the other hand, it also serves an investment opportunity for you.

The policy of permanent life insurance includes something called “cash value”. The longer you have owned your insurance account, the more money you are bound to earn from this investment. This has no expiration date. As long as you have your life insurance account, you have unlimited chances of doubling the value of your money.

  1. Whole Life Insurance

In whole life insurance, the premium that you pay each month is divided into what goes into your insurance and what goes into your investment.

This is not exactly what you would call low cost life insurance but basically, you are paying less for more because whole life insurance does the task of providing your beneficiaries with money when you pass away and standing as an investment vehicle at the same time.

Just like permanent life insurance, whole life insurance also increases your value worth the longer you keep your account active.

  1. Universal Life Insurance

This one is a bit similar to whole life insurance in some ways. Both of them serves as an investment vehicle and life insurance. The only difference is that in universal life insurance, you get to access a certain amount of the money that you earn as an investment so you can adjust your yearly premiums.

Even though this seems like an appealing option, it is not mostly recommended because there could be lots of management fees in the long run. Technically, your fees could get higher and higher in the long run. As a result, universal life insurance may not serve you much in terms of savings or investment.


These aren’t the only life insurances available today. However, these are the most basic ones that any average person could need. Study each of these life insurances carefully and assess which one would be benefit your needs.

Nicole Hennig
Nicole Hennig is a freelance writer, content writer, blogger, and also a photographer. She graduated from the University of Caloocan in Johannesburg, South Africa in 2015.

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