Mary Frederick answered
There are a minimum of ten (10) different types of Life Insurance, each issued and purchased based upon the specific, projected future needs of the insured person and beneficiaries. Basic Whole Life Insurance, which today is often called life assurance, provides a future financial payment, to designated beneficiaries upon the death of the insured person. This policy can also act as an investment or savings instrument for some people. For instance, if I have more insurance coverage today, than will needed to cover my burial and other expenses at the time of my death, I can cash one or more life insurance policies and use the excess money for my personal needs today. Other forms of life insurance are term life insurance sold especially for young adults or children. The purpose of such term insurance is to cover the life of the insured with a large amount of money for a specific number of years. Usually, the term or duration of coverage is 20 years. Term life insurance gives assurance to a young parent, that the spouse and children will be provided for financially, in the event of death for one of the spouses. The amount of coverage can be of various denominations. EXAMPLE: A 25 year old couple can purchase a term life insurance policy for each of them. The term could be 20 years and the value could be $100,000. The monthly premium for each could be about $23.00 per policy. This is a good move on the part of parents today who want to provide for each and children in the event of the death of one spouse. The number of years, cost, and face value of policies can vary. A Decreasing Term Life Policy is never a good idea for young people, because the face value of the policy decreases each year and the premium remains the same. From my personal experience this is a waste of money for young people with young families. Because whole life, universal life insurance and permanent life insurance are all policies which cover the lifetime of the insured. They also accrue interest from the premiums paid and in time, these life insurance policies can be borrowed against. Of course, if one does borrow against the policy the face value would be reduced at the death of the insured, unless the loan is paid back prior to that event. These life insurance policies all cost more than term insurance. Often, adults cannot afford these and they purchase term insurance hoping they do not outlive the policy, which is a bit risky. The younger a person is when insurance is purchased the less money will be paid out by the insured over a lifetime. Life insurance contracts vary dependent upon the type of instrument stated the coverage, limits and exclusions of the policy. The premiums, the face, and all other reuirements and specifications of the policy. The kind of policy and the purpose of the dictates the wording of the policy. Not all contracts are the same and all contracts should be be read very carefully before one signs a statement of acceptance, which a requirement in some states. To purchase a life insurance policy a person contacts an insurance agent, broker or agency and arranges to meet with a sales person. Often, insurance agents and brokers will come to the home of a potential client. Sometimes the person seeking insurance goes to the office or agency and meets with a salesperson. I recommend never purchasing a policy from an insurance agent or broker who is overly anxious in his/her attempts to sell a policy on the "spot". Take the time to review and discuss an insurance policy with a spouse, parent, or attorney, especially when it involves a large premium. Always buy policies, which have a Best A+ or higher rating by the Insurance industry. For additional information you can enter, Define; Life Insurance into a Google Search bar and click. You will then see a Google Web Page with definitions of Life Insurance, and links to Insurance agencies. I did not click on any of the links, since I was only seeking definitions. If, you do not have Google, enter these words into another search bar and you will get a list of websites about Life Insurance from, which you can choose. You also can go to a local library and read some samples of life insurance contracts in the Insurance reference section. Just ask the librarian for help!
