Life insurance is the best way to make sure your family is taken care of when you're no longer able to take care of them. In Colorado, there are four types of life insurance policies: Term Life, Whole Life, Universal Life and Variable Life Insurance.
Term life insurance is the simplest and least expensive type of policy. This type of policy pays a predetermined lump sum to the designated beneficiary upon the death of the insured person. The policy limit is the amount of the death benefit, which means a $100,000 policy pays $100,000. Term life ensures your family is covered by replacing your income, salary or other monetary contributions, and covering final expenses incurred due to death.
Whole life insurance is more costly than term life but has an added benefit. This type of policy provides financial protection for dependents while building cash value. When the insured person dies, the policy pays the death benefit, but if the policy is surrendered, the policy owner receives the accumulated cash value.
Universal life insurance is more flexible than a whole life policy. It allows the policyholder to control the amount of the death benefit or vary the timing or amount of premium payments. Like whole life, it accumulates cash value and pays a death benefit to the designated beneficiary. It also allows the policyholder to make withdrawals or take out loans against the policy's cash value.
Variable life insurance offers additional investment options in separate accounts but requires the owner to manage the investments.
Taking the time to learn about life insurance options allows you to make the best choices to protect your loved ones. Allen Insurance Services is your trusted source for life insurance and can help you to understand each policy type better. For more information or to get a quote call our office today.