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The Life and Health Insurance Foundation for Education (LIFE) is a non-profit organization designed to address the public's growing need for information and education on life, health, and disability insurance
Their are many types of life insurance to fit individual needs and circumstance. The following are some of the basic types of life insurance available.
Term Insurance - The simplest form of insurance. You purchase coverage for a specific price for a specified period. If you die during that time, your beneficiary receives the value of the policy. There is no investment component.
Whole Life
- Similar to term, but you purchase the policy to cover your "whole
life" not just a set period. Premiums remain level throughout the life
of the policy, and the company invests at least a portion of your
premiums. Some firms share investment proceeds with policyholders in the
form of a dividend. Many companies will offer "a relatively low
guaranteed rate of return," but in reality pay at a rate in excess of
the guarantee.
Universal Life - You decide how much you want to put in over and above a minimum premium. The company chooses the investment vehicle, which is generally restricted to bonds and mortgages. The investment and the returns go into a cash-value account, which you can use against premiums or allow to build.