Life Insurance – Different Policies to Choose From!
Different Types of Life Insurance Policies
Deciding what type of life insurance policy will meet your lifestyle requirements. That is the first step when wanting to take out a life insurance coverage plan. There are different types of life insurance policies. Each has their unique set of advantages and disadvantages that will determine whether you choose it or not.
It is important to know the differences and similarities of each plan to make a smart decision regarding life insurance. In South Africa, three different types of life insurance plans are available for people to choose. Below you will find a brief explanation of each!
Whole Life Insurance
Whole life insurance policies are the most commonly chosen type of life insurance amongst South Africans. As a more comprehensive policy, whole life insurance offers a guaranteed payout once you pass away.
On top of that, money can be withdrawn or borrowed from the life insurance policy by the insured person during his/her life. One makes monthly payments on this policy from the day that you decide to invest until the day you either die or surrender the policy.
A cash value is build up over this period on this type policy plan. The cash amount build-up will determine how much you can withdraw or borrow before you pass away. These plans more than often also have added benefits that will be unique to each insurance provider.
Term Life Insurance
Second in line is a term life insurance policy. This policy plan only offers coverage for a predetermined period. Thus, one can only take it for ten, fifteen or twenty years.
That is a great policy plan to take out during major time frames of your life, and they tend to be extremely budget-friendly. The only downsides of these policies are that they have no cash value once you pay the policy off.
Coverage will thus cease to exist when your predetermined term ends, and they can guarantee no payout can. It usually takes as an additional policy in conjunction with whole life insurance.
Universal Life Insurance
For those who have bigger budgets, this life insurance plan is a favourite. It consists of two parts namely a whole life policy and an investment. It works the same as whole life insurance plans, but an additional cash amount will be credited to your policy account when you make payments above your monthly premium.
You also earn interest on this overpaid cash amount each month. That makes this policy a great possibility for rapid growth on your life insurance investment.
If you are still struggling to choose the best type of plan for you, speaking to a reputable life insurance broker about each in detail will help you make the decision.
They will be able to help you determine which plan will suit your predetermined budget as well as your family needs. Also, ensure that you receive quotes on all three plans from the broker with who you spoke.
For a FREE life insurance quote simply enter your details into the form provided and click the GET A QUOTE button!
All info was correct at time of publishing