A life insurance policy is basically a contract which is signed with an insurance company and you. Hence, the insurance company provides you a round sum payment, in the transaction for the premium payments, usually after the death of the insured, and generally known as “Death Benefit.”

As is the custom, life insurances are usually chosen based on the goals or needs of the customers or owners. We can basically divide the life insurances into three main streams. The following excursion is about the insurances in short.

Term Life Insurance

Term life Insurances are generally such a type of insurance basically based on giving you protection for a set period of time, like 10 or 20 years. The payment rates remain unchanged (that is, stays the same) for the coverage period of time you select. After that time period is over, the insurance companies may offer you to continue its coverage but, usually at a higher payment rate. It is notable that term life insurances are less expensive than the permanent ones.

Universal Life Insurance

Universal life insurances are generally contrived for providing coverage to you for a lifetime. Their policies are quite flexible and they may allow you to lower or raise your premium coverage loads throughout your whole lifetime. It is mentionable that, as the universal life insurances give you coverage for a lifetime, it has higher and more premium payments than the term life insurances.

Whole Life Insurance

Likewise the universal life insurances, whole life insurances are designed to provide coverage for lifetime – a sort of permanent life insurance. Here, you need to a pay higher cost than the term life insurances. The policies of whole life insurance are not flexible like the universal life insurances – they are fixed.

Now, let’s have a small comparison in between the three life insurances –

  Term Life Insurance Universal Life Insurance Whole Life Insurance
Needs Term life Insurances will meet Term life insurances are basically for replacing your income during the years you work. ·         Transfer of money or resources

·         Protection of income

·         Designs focused on delayed tax money accumulation

 ·         Transfer of wealth and preservation

·         Delayed tax money accumulation
Period of protection These life insurances are generally designed for a fixed and specific period of time (usually for a couple of years, such as 10 or 20 years) Usually they are planned for a lifetime and quite flexible Generally for a lifetime
Differences in Cost Term life insurances are often less expensive than the permanent ones Somewhat more expensive than term life insurances Somewhat more expensive than term life insurances
Premium Facilities Generally, premium options are fixed for term life insurances You can get flexible premium options for this life insurance Premium options are fixed for whole life insurances
Options for Investment There is no scope for investment for the term life insurances There is no scope for investment for the universal life insurances There is no scope for investment for the whole life insurances
Fidelity Availability Term life insurances are available through fidelity Universal life insurances are available through fidelity Whole life insurances are not available through fidelity