There are various types of life insurance. Deciding which one is suitable will depend on several things, like your budget and the duration of the policy. Buying insurance gives you the confidence to face any situation in life because of its financial security. Good insurance enables you to cover the mortgage and support your family in housing and education. Should you pass away, reliable insurance firms like AARP life insurance will cover any loans you will have left behind.
Below are different types of life insurance policies you should be aware of:

1. Universal life insurance
Universal life insurance is an umbrella term for policies that offer cash value life insurance. Depending on the policy (see below for types, and terms) any excess of premium payments above the current cost of insurance is credited back to the cash value of the policy. That means credit is returned each month with interest. Universal life insurance policies are offered under these three categories:

• Guaranteed universal: This form of insurance comes without any market risk. Your premiums remain constant, and you will have coverage as long as you continue paying so you’ll get stability, but not a cash guarantee. This policy is suitable for risk cautious people that want long-term insurance.
• Variable universal: Offers an interest rate set by the company that may vary from time to time. The advantage of this type of insurance is that the cash value may grow. However, the downside is that entails a lot of effort on the policy holder’s part. This policy is ideal for investors that do not mind being very hands-on.
• Indexed universal: A popular universal life insurance policy, the cash value varies according to the rates selected by the insurer depending on the stock market performance. It offers good gains on cash value, but insurance firms often put investment caps to curb your profits. If you want guaranteed minimum returns, this type of policy is a safe investment.

2. Term life insurance
This type of insurance is only valid for a given period before it is terminated. You are required to make monthly payments, and should you pass during the period, the death benefit will be given to your chosen beneficiary. While many people prefer to have it paid out as a lump sum, the benefit can be paid out monthly or as an annuity. The advantage of getting it as a lump sum is that it means less taxes. Although it comes with an expiry date, this type of insurance is very affordable.

3. Whole life insurance
Among all types of permanent life insurance, this is the most common. Whole life insurance grants a death benefit to beneficiaries. However, it is very different from term life insurance. With whole life insurance, policies are usually accompanied by a cash value, similar to a tax-deferred investment account. The most significant advantage to this policy is its cash value and provision of lifelong coverage. Nonetheless, whole life insurance can be costly, and the associated charges make it complex to undertake. It may be a good option for younger clients who are willing to pay more.

4. Variable life insurance
This type of insurance has a module that makes it look like you are simply investing. Your premiums are invested in smaller accounts to make some good money. However, the catch is that you can also endure a loss depending on the market. Variable life insurance has a good savings potential, but its policy lapse is very risky.

5. Simplified issue life insurance
Also referred to as the no-medical-exam policy, simplified issue life insurance lets you avoid a medical exam, but you’ll still complete a health questionnaire. It helps cover burial costs, but comes with some price and health restrictions. This insurance is suitable for elderly recipients with no complicated health problems.

6. Guaranteed issue life insurance
This insurance requires neither a health questionnaire nor a medical exam. All you need to provide is your gender, age and residency. The advantages are similar to simplified issue life insurance, but this insurance has higher premiums for considerably low coverage. The elderly and those with terminal illnesses are best suited to this type of life insurance plan.