Insurance

Types Of Life Insurance Explained



There are many different kinds of life insurance . Term Life, Whole Life, and Universal Life are just three of the most basic kinds. Check out life insurance expert Byron Udell break down the main three different types of life insurance .

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Read the Video!

Hi. I’m Byron Udell, Founder and CEO of AccuQuote.

Since 1986, we’ve helped millions of people save money on their life insurance .

When you boil it down, there are really only two kinds of life insurance : “Temporary” coverage, which is called “Term Insurance”…and “Permanent Insurance.”

Both Term and Permanent life insurance come in various shapes and flavors to satisfy different needs.

Permanent insurance is designed to provide coverage for as long as you live. If your needs are long-term, like estate planning or final expenses, or if you just want to leave a bigger legacy, no matter when you die, permanent life insurance is probably the way to go.
There are lots of different kinds of permanent insurance , but the two primary categories are…whole life and universal life. And I’ll come back to these in a minute.

Term life insurance is, by definition, “temporary” insurance . It’s designed to provide coverage for a limited period of time, typically 10, 20 or 30 years. Term policies are simple and extremely inexpensive. In most cases, your cost each year is guaranteed to remain level for whatever the term is. Again, typically 10, 20 or 30 years. After the term is over, make sure you’re sitting down when you receive your premium notice, because your rates are going to jump up dramatically. Sometimes by a factor of as much as 10 or more.

But some of these policies have a built-in conversion option that’ll allow you trade in your term coverage for a shiny new permanent policy.

Term life makes sense if you know when you’re going to be financially independent or if you’re sure there’s some date down the road where no one will be depending on you anymore financially. Like when your kids are all grown up and your mortgage is all paid off.

Term is also good when you’re younger and your biggest concern is getting the protection in place and keeping your costs down.
If you’re a non-smoker in your 30s and healthy, you can buy a 20-year, $250,000 term policy for less than $20 a month.

Sounds too good to be true? Well, it’s 100% true.

Now back to Permanent Life Insurance. Whole Life and Universal Life insurance are more expensive than Term, but let’s look at what you’re getting for the money.

Unlike term insurance , permanent insurance in general ly designed to last forever. You can’t outlive a permanent life insurance policy. With most permanent policies, as long as you pay your premiums on time, your family is guaranteed to receive the death benefit…no matter when you die. Whether that’s tomorrow or 50 years from now.

Unlike term insurance , permanent insurance policies can also build cash surrender values, which can be accessed at any time, for any reason. You can set up your premiums to be level of life…guaranteed. You won’t have to worry about premiums going up when you get older and forcing you to drop the policy. Nor will you have to worry about being healthy enough in the future to have to requalify or replace the coverage. If you like, you can also arrange to pay for the policy over a shorter period of time, say 10 years, so after that, you own the coverage…and no further premiums are due for the rest of your life.

Universal Life Insurance, one kind of permanent life insurance , offers a certain amount of built-in flexibility. You have the ability to change your premiums and death benefits to keep pace with changes in your life.

Whole Life Insurance is what I refer to as the “Rolls Royce” of life insurance . Whole life costs more than all the other types of life insurance we’ve discussed, but it does more. Over time, these policies develop significant cash value that are guaranteed and can be accessed at any time. Regardless of what happens in the economy, each year, the cash values grow…guaranteed.

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Comments (31)

  1. Failed to explain that the big sac of cash value goes bye-bye when you die-die.

  2. I can get better unbiased advice from a 3 LEGGED HORSE'S ASS

  3. He made right about 5% on that whole life policy "investment"

  4. Scams

  5. The image of the family having dinner and getting bags of cash was a little bit …. they were smiling too…

  6. If you have no dependents or no one that relies on you never buy Life Insurance I repeat if no one depends on you do not under any circumstance buy Life Insurance why are you giving it to. Also Never by Universal whole life insurance they only make money off those policies you're better off buying term and invest the difference insurance is only meant to be temporary as you get older you acquire more assets and money in your savings so at the age of retirement you should not need life insurance your need will decrease the older you get the less insurance you will need. term life insurance is 90% to 95% cheaper and pure insurance. Buy Investments outside of insurance you don't have to pay to borrow your money that way

  7. thanks for the help……………………..

  8. Im 23 years old but dont know if i should go through and getting life insurance this is so confusing on witch one to get

  9. Term insurance is for the people in the age group of 25 -30. Permanent insurance is for people above 40 years of age. Premium is low in term insurance compare to whole life insurance.

  10. this video has out dated information, the Best is an Indexed Universal Life Policy, if you want more information on the best product out right now please send me a message and we can connect and i can give you a quote and show you how we can protect you and your families future.

  11. what does cashvalue mean

  12. whole life is bull stop getting finessed!

  13. Why is everyone having a different meal at that dinner table? Mama don't play that.

  14. You explained this so well

  15. Make the commissions the same and POOF! Nobody sells anything but term. It has MUCH lower premiums than any permanent policy.

  16. Are you seriously promoting life insurance as an investment plan?

  17. You didn’t mention private placement life insurance.

  18. Help! I got lost when he said you can pay premiums in 10 years and you own the policy. what does that mean if anyone can explain a little better

  19. Thanks for this completely biased video on why we should get permanent insurance. Sorry bud, but $217k in a whole life policy just sounds foolish to me. You left out the part that the insurance company keeps all that money when you die. Not your estate or beneficiaries.

  20. This mofo looks shady as fuck

  21. 4:30 minutes into life insurance and chill and he gives you this laughable insight. Over $4000 a year paid over a 25 year period (give or take any minor adjustments over time) and his "investment" only yields $217,000?? He also says that's much better than his other investments? This guy has some terrible investments if he couldn't become a millionaire in a few decades with that much consistent cash outflow. The cash value in WL plans have a horrific rate of return, and you're better off taking all the money you'd save on a term plan, and invest it somewhere real. Investments and insurance work better when they are separate.

  22. Buy term and invest the difference

  23. That's pretty sad. 25 years at that premium and cash surrender value comes out to a 4.6% rate of return. Why would you be impressed about that when you could make so much more in other investments. Even if the investment gurus out there are wrong on their high returns suggested you can still do better than this. My 401k took a hit in 2008-9 but came back just fine. When I learned more and changed my mix I made far more. Last year was freaky and I made close to 20%.

  24. I have no idea if this guy is just an actor or just a liar. 2 main points that people must know when he said that he’s had a Whole Life policy for 25 years and pays $4,635 annually and has a cash surrender value of $217,000.
    1) $4,635 x 25 years = $115,875. Most Whole life policies can’t have a cash surrender value way higher than the amount of premium paid for it because it will become a MEC and that automatically converts it into an investment and brings penalties for the company and taxes for the client.
    2) If that were true, and he dies, his beneficiaries will only get the life insurance benefit and NOT the cash value. So that would be $217,000 down the toilet. So it’s not an investment… it’s just a savings that belongs to the life insurance company until you claim it while you’re alive.and when you do you MUST surrender your policy.
    YOU ONLY GET EITHER… OR with Whole Life.

  25. Are you looking for a good and better insurance life policy? Are you interested in securing the future life of your children or family or love ones while you are gone or after your death? If yes,you don't need to look further, at Royal Exchange Prudential life PLC,we provide you with the best life insurance policy which your children or family or love ones will benefit after you are gone. You can contact our agent Hackerkimcuppy@gmail.com

  26. Thank you! This was very informational.

  27. This is a pretty fair and informative video. One caveat: a lot of universal life policies have collapsed, because the internal costs of the policies keep rising as people get older.

    IMO the best types of term insurance is convertible term (fairly cheap term insurance that can be converted to whole life if you wish). It’s good to keep your options open and it’s a way to have guaranteed permanent insurability without the high cost of whole life in the early years.

    (I don’t sell life insurance, but I write about it and I own convertible term).

  28. sounds like he is really not telling the truth

  29. Thanks for breaking them down!! Better video than the first five in the search results.

  30. So what happens if your term ends and you don’t want to pay it no more? Do u get a partial return or can turn it into a ira account?

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