Life Insurance: Term, Whole and Universal

When creating a financial portfolio, one common piece of the portfolio commonly forgotten is the basic fundamental life insurance policy. With so manyoptions andvarieties oflife insurance on the market, individual investors are often left confused and frustrated as to what type of life insurance should purchased based on their personal and financial goals. Just as each individual investor has unique portfolio, so are the varied life insurance policy options.

Life insurance iskey financial vehiclethat should be part of every individual investors portfolio. With options varied, life insurance can be purchased in terms, can be purchased to expire at a specific age, can be classified as "whole life" coverage, and can even be, what is called, a universal plan or a plan assiged to a specific illness.The type of coverage purchased will depend, largely on the anticipated finanical status of the individual investor both at the time of purchase and what is anticipated to occur with age.

In life insurance plans which are establishedfor a specific number of years, i.e. 10 years,five years and even one year, the plans usually expire at age 75. The success of theterm life insurance coverage lies in thebenefit amount remains level, without increasing or decreasing with age, andpremium amounts remain intact provided the individual holds the policy for the fullbenefit period without missing a premium payment.

As an alternative to term life insurance, an individual investor may opt to purchase what is known as whole life insurance. Under a whole life insurance policy, the benefit level remains consistent for the term of the policy plan and premiums may either remain consistent or fluctuate depending on the terms of the policy. The advantage to whole life insurance plans lies in the cash value component. As an individual investor, the cash value component of the whole life insurance policy provides for a cash value upon a specific maturity date should that date arrive before the time of your death.