Life Insurance Policy Definition

Term Life Insurance vs. Whole Life Insurance. When choosing a life insurance policy two of the main types of plans available are term life insurance and whole life insurance. There are major differences between the two types of policies and this article will assist you with making the choice .... Financial Definition of term life insurance. Term life insurance is a policy which provides financial coverage during a set amount of time. Often considered the "simplest" form of life insurance, it is best suited for providing coverage or income for a short term and on a limited budget.. A life insurance policy that is active for the entirety of the policyholder’s life. Permanent life insurance policies offer a cash value component that makes them more expensive than term policies and is usually only a good option for people with particular circumstances.. Term life insurance, also known as pure life insurance, is life insurance that guarantees payment of a stated death benefit during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the policy to terminate..

Term life insurance lasts for a set number of years before it expires. If you die before the term is up, a set amount of money, known as the death benefit, is paid to your designated beneficiary. Term life is considered the simplest, most accessible insurance policy.. Whole life insurance provides coverage for the life of the insured. In addition to providing a death benefit, whole life also contains a savings component where cash value may accumulate. These policies are also known as permanent or traditional life insurance..

Life Insurance. The primary reason to take out life insurance is to safeguard your dependents in the event of your passing. But unlike simple term life policies, which just pay a death benefit, permanent life policies (also known as cash-value policies) add a savings component.. Variable life insurance policy definition. Meaning: A whole life insurance policy that provides a death benefit dependent on the insured's portfolio market value at the time of death. Typically the company invests premiums in common stocks, so variable life policies are referred to as equity-linked policies.