Different types of Life Insurance

Life insurance can help cover the financial needs of your family and dependents in the event of your death.  The beneficiaries will generally receive a lump-sum payment that can be used to cover outstanding mortgage payments and debts, living and education expenses of the family.

The following are the most common types of life insurance:

Term Life Insurance

As its name already indicates, term life insurance provides coverage only for a specified period of time, generally during which your responsibilities to your family are the highest. 

The premium can be level for a fixed period or renewed yearly and is generally more affordable since the policy does not accumulate cash value.

Whole Life Insurance

Whole life insurance typically carries a cash value supported by dividends(guaranteed and/or non-guaranteed) paid by the insurers over time.  Therefore the premium is much higher than that of term life insurance as it has to build a sufficient cash value and cover the cost of insurance that increases over time. 

Some policies might have a higher degree of savings elements than life-protection elements and might be suitable for retirement savings and legacy planning.

Universal Life Insurance

Universal Life Insurance is a type of permanent life insurance policy that provides more flexibility as policy holders are allowed to top-up premiums and death benefits of the policy over time.  How the fees and cash values are calculated is also more transparent than those of whole life policies.

Summary

Depending on your life stages, family and financial circumstances, your life insurance needs may vary. Please contact us if you are interested in getting life insurance that best fits your needs.

Last Update: 13th June 2023