Six types of life insurance policies you can consider today

Wondering which options are available for you when considering life insurance? This guide provides you with everything you need to know. Before that though, it’s important to mention that this policy allows you to rest easy knowing that you and your loved ones are financially protected if you become critically ill or pass away.

With that, let’s dive in to review the six main types of life policies you should consider today.

Whole of Life insurance

This policy provides your loved ones with a lump sum pay-out when the inevitable happens. Just as the name suggests, it provides protection for life on condition that premiums are paid continuously.

Most people prefer it because it guarantees a death benefit irrespective of your age. Unlike level term insurance that runs for a fixed duration of time, Whole of Life plans cover you indefinitely.

This type of policy not only provides stability but also can be a valuable benefit to your loved ones in the event of your passing.

Generally, Whole of Life insurance tends to be more expensive than its term counterpart because it accommodates any eventuality. The amount of premiums you’ll be required to pay is dependent on factors such as health, age, and lifestyle. The higher the risk, the higher the premiums.

Critical illness cover

This policy provides a payout if you undergo surgery or are diagnosed with a critical illness. It provides financial support for you and your loved ones while you get back on your feet. The payout can be used to cater for household or medical expenses based on your financial needs.

It’s important to note that critical illness insurance only covers various predetermined conditions such as heart attacks, cancer stages and stroke. The policy will clearly state what will be and what will not be covered. Therefore, ensure that your needs are accommodated in the policy before taking it out.

This kind of policy can help replace your income should you become disabled or ill suddenly. Consider the plan if your employer does not provide an employee benefits package or your savings are not sufficient to sustain you financially through a phase of not working.

Level-term life insurance

This policy provides guaranteed financial protection to your loved ones should you pass away during a specified term. It’s the simplest type of policy and the most popular because the payout and premiums remain the same over the contract term.

Level-term insurance policies are straightforward and easy to understand. Your loved ones receive the death benefit that you chose when taking the policy should you pass away within the specified period. Usually, its premiums are relatively lower when compared to the Whole of Life plan.

Income protection

Also referred to as permanent health insurance, this policy is designed to provide financial protection should you take time off work to recover from an injury or illness. The cover allows you to rest easy knowing that you and your loved ones are supported financially should an unfortunate incident disrupt your income.

Permanent health insurance is available both in the long-term and short-term, which means you can choose a cover that addresses your needs. Another benefit is that it pays out until you retire or resume work.

You should consider this plan if your time off work due to an injury or illness can affect your ability to manage your bills.

Family income protection

Also referred to as Family Income Benefit Insurance, this type of policy offers a cost-effective way to ensure that your dependents are supported financially over a set period.

The policy provides a regular simple income that your loved ones can easily manage and lasts for a longer time than a lump sum pay-out.

You should consider this kind of policy if you have children or a spouse whose quality of life would be affected without your monthly income. Purchasing it will give you peace of mind knowing that they can keep up with their bills and live normally should you pass away.

The amount of premiums paid depends on the amount that you want your dependents to receive every month and for how long.

Mortgage life insurance

As the name implies, this policy is designed to repay mortgage debts and related costs should you pass away within the term of contract. You should consider it if your loved ones cannot afford to clear the mortgage once you depart.

Mortgage life insurance policies decrease over time. The amount covered reduces in line with your mortgage repayment, which is why it is referred to as decreasing term life insurance.

Besides, the plan aligns with your mortgage term. What this means is that if your mortgage term is 20 years, the term of the policy should last at least the same time.

Conclusion

Securing the future of your loved ones is not something you can take for granted. Life insurance policies allow you to provide for your dependents even after your demise. Depending on the type of policy, life insurance gives you comfort knowing that money will be available to protect you and your loved ones should you fall ill or pass away.