Life insurance is a contract between an insurance policyholder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policyholder). The policy holder typically pays a premium, either regularly or as one lump sum. Other expenses, such as funeral expenses, can also be included in the benefits.
**Term Life Insurance – provides life insurance coverage for a specified term. The policy does not accumulate cash value. Term insurance is significantly less expensive than an equivalent permanent policy but will become higher with age.
**Whole Life Insurance – is an insurance that you pay for life or until age 100. It terminates at age 100 and the sum assured is given to the policyholder.
**Universal Life Insurance (ULl) – is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. There are several types of universal life insurance policies, including interest-sensitive (also known as “traditional fixed universal life insurance”), variable universal life (VUL), guaranteed death benefit, and has equity-indexed universal life insurance. Universal life insurance policies have cash values and death benefit.