This is Nate Nevins with Nevins Financial. Today we’re going to start our series on life insurance just so we can understand what are the different types of life insurance, first of all, and then we’ll go through each one individually in this series to better understand each one, so that you can make a better, more informed decision on which one actually suits your needs and your situation. So we’ll go ahead and go over the basic types of insurance first and then we’ll, from there, go ahead and go on to individual life insurance policies.
The three different types of life insurance are, first, term insurance. Now with term insurance, basically, you have a level premium, and a level death benefit for a certain amount of years, we’ll just say twenty years. And at that twenty year period of time the benefit ends, it’s very similar to auto insurance, and that’s it. If you hadn’t made a claim because you hadn’t died within that time, you had paid premium for those years, right here, and the benefit then ends. Now you can typically renew term insurance as well, but that gets kind of expensive. But that’s term insurance in a nut shell.
The second kind of insurance is permanent insurance. We’ll call it perm. for short. This works a little bit differently. This one has a level premium, similar to term, but it also has an increasing death benefit. And within this death benefit you actually build cash value. So you can use it during your lifetime and it’s not just for the purpose of death benefit, so you could use it for many different things. One of the things with permanent is that it’s much more expensive than term insurance, however it does last your lifetime if it’s structured right. So that’s a very good one to consider if you maybe want more options with your life insurance instead of just losing at the end of whatever term it is.
And then the last type of insurance Is going to be a Guaranteed Death Benefit Universal Life Policy. We will just call it GDBUL for short. Basically, this one you can think of as a lifelong term. It has the level premium. It has the level death benefit, but instead of just ending at a certain time period it goes for your whole life. So the cost of this one is generally in between that of a permanent policy and term insurance, but it does last for your life.
So those are the three different types of life insurance in a nut shell. Again, it’s a basic overview of life insurance and the three kinds that there are. There are actually subcategories under each one of those, which we will go over in greater detail in future videos. But if you have any questions right now feel free to go onto nevinsfinancial.com and fill out the contact form which we have on our website with your questions or we also have a free quoting software on there as well. You can fill that out and we’ll have somebody get in contact with you for that.