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universal life, term life In 2003, about 6.4
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Life insurance products for groups are different
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In 2003, virtually all (97 percent) of the term
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What are the principal types of life insurance?
There are two major types of life insurance�term
and whole life. Whole life is sometimes called
permanent life insurance, and it encompasses
several subcategories, including traditional whole
life, universal life, variable life and variable
universal life. In 2003, about 6.4 million
individual life insurance policies bought were term
and about 7.1 million were whole life. Life
insurance products for groups are different from
life insurance sold to individuals. The information
below focuses on life insurance sold to
individuals. Term Term Insurance is the simplest
form of life insurance. It pays only if death
occurs during the term of the policy, which is
usually from one to 30 years. Most term policies
have no other benefit provisions. There are two
basic types of term life insurance policies�level
term and decreasing term. Level term means that the
death benefit stays the same throughout the
duration of the policy. Decreasing term means that
the death benefit drops, usually in one-year
increments, over the course of the policy�s term.
In 2003, virtually all (97 percent) of the term
life insurance bought was level term. For more on
the different types of term life insurance, click
here. Whole Life/Permanent Whole life or permanent
insurance pays a death benefit whenever you
die�even if you live to 100! There are three major
types of whole life or permanent life
insurance�traditional whole life, universal life,
and variable universal life, and there are
variations within each type. In the case of
traditional whole life, both the death benefit and
the premium are designed to stay the same (level)
throughout the life of the policy. The cost per
$1,000 of benefit increases as the insured person
ages, and it obviously gets very high when the
insured lives to 80 and beyond. The insurance
company could charge a premium that increases each
year, but that would make it very hard for most
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