| Whole Life Insurance
A conservative policy that guarantees the death benefit and premiums for the life of the policy. Whole life offers an internal cash value based upon dividends paid by the insurer. When comparing types of whole life insurance make sure to review the 20 year history of dividends paid by the life insurance company. Whole life insurance is not something one should buy based soley on current dividend scales, review the historical performance.
Term Life Insurance
This is the least expensive type of life insurance a person can own. There is no cash value associated with term, and premiums only remain level for the "term" of the policy. Hence a 20-year level term policy will have level premiums for 20 years, and after 20 years the premiums will skyrocket out of control to the point you would most likely not be able to afford the premiums.
Universal Life Insurance
Depending on the type of universal policy purchased it may or may not guarantee a death benefit. Some universal life policies have a secondary guarantee which guarantees the death benefit, however these policies do not provide you with easy access to your cash value during your life. If you take a loan out from your cash value you lose your death benefit guarantee. Many times if you are ever late with a premium payment, you also lose the secondary guarantee. Universal is usually less expensive than whole life insurance, however it does not offer the security whole life does.
Variable Life Insurance
The performance of this life insurance product is tied to the market. During the last bear market, many people experienced the worst that variable life insurance has to offer.
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