Life insurance rates by type

There are reasons why term life insurance is one of the cheapest form of life coverage. Term life insurance has almost the fewest bells and whistles. Other types of coverage offer different, mostly higher rates for additional features:

Accidental death and dismemberment insurance (AD&D)

One of the cheapest forms of life insurance, AD&D covers only the direct, proven results of an accident. It has very specific coverage that provides very limited protection. It can be purchased as a rider on an existing term or other type of life policy or as a stand alone policy.

Burial or easy issue Insurance

Called graded life, graduated benefit, final expense, and several other names, burial insurance is designed to primarily get you into the ground. The application is yes or know with only a few knockout questions (Are you incarcerated, Do you have HIV? etc.) The monthly premiums are comparable to term life insurance, but the death benefits are much lower.

Whole life insurance

Whole life insurance provides permanent protection for your dependents while building cash value. With this type of insurance, the insurance company manages the policies's various accounts. Because it last until age 100, the price is much higher than term.

Variable life insurance

Pays a death benefit to the beneficiary you name and offers you low-risk, tax-free cash accumulation. Variable allows the death benefit to vary in relation to the fund returns of the cash value account. You can also be allowed to borrow from the policy during your lifetime. Variable doesn't allow you to change the premium or face amount. Fees tend to do be higher, and the price is more than whole or term life insurance.

Universal life insurance

Provides permanent protection for your dependents and is more flexible than whole or variable life. Universal also allows you to earn market rates of interest on your cash value account. You can borrow or withdraw from the policy during your lifetime or change the premium. It offers face amount flexibility. Universal life doesn't allow you to invest in separate accounts such as money market, stock, and bond funds. Much more expensive than term life insurance.

Universal Variable life

A buffet type of life insurance which gives you more control of cash value account policy features than any other insurance type. You must make larger premium payments because your premium must cover your life insurance and your investment accounts. You (or your agent) must devote time to manage the investment accounts. The policies long term success is contingent on the investments chosen. A very popular type of life insurance with life insurance agents because it's a complex product with fat commissions. Much higher rates than term life insurance.

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