What are other types of life insurance besides term, whole and universal?

There are two basic types of life insurance, term life and permanent life. Term life is a basic life insurance policy written to cover you for a specific number of years, but permanent life insurance branches out into several types of policies. There is only one kind of term life insurance, but there are many variations on permanent life insurance.

Whole life is what most people think of when you mention permanent life insurance. This is a basic permanent life insurance policy that provides an accumulated cash value in addition to the actual face value of the policy. Whole life is one of the most affordable types of permanent life insurance, but it is also relatively basic in how it works. A portion of your premiums are put into the cash value, which will continue to grow as long as you make your premium payments.

Universal life insurance is a type of permanent life insurance that allows you to participate in how the premiums are invested, potentially giving you a higher return on the investment. The amount of interest you can earn on the policy is typically fixed, but there are variations. Universal life insurance variations include variable universal life insurance, which operates like universal coverage, but has variable rates.

Other types of permanent life insurance policies include single-premium life insurance, survivorship life insurance, and final expense insurance, among others. Talk with your insurance agent to find out what options are available from your current insurer.

Keep in mind that any permanent life insurance policy which offers potential earnings also has the potential for losses. The face value of the policy cannot be lower than what you purchased the policy for, but the cash value in the account can drop to nothing if managed incorrectly. In general, the cash value of a life insurance policy is a handy way to make it possible to save money while buying life insurance.