Life Insurance Types - A Brief Explanation

Universal Life is a form of permanent whole life insurance. It is based on a cash value. The cash value comes from premiums that are higher than the protection. The remaining cash is credited to the cash value. Interest is paid each on the cash value. The cost of insurance (COI) is debited each month from the cash value. If no premiums are made during a particular month the premium is withdrawn for the cash value. The insurer determines the interest that is credited to the account. If the interest is pegged to a financial index, this often time referred to an indexed universal life (IUL) policy.

Life Insurance for Business: Are written for business continuation, partnerships, and buy sell agreements. The untimely death of a business owner can be devastating to his or her family. If the business is a partnership or a corporation one owners death can leave the surviving partners or shareholders in a pickle. For example in a buy sell agreement the surviving partner usually buys the deceased partners part of the business. There are three ways to fulfill this responsibility. One is to pay it out of liquid assets that you own. If you do not have this kind of money you can resort to option two, take out a loan. A couple of disadvantages to this are, you may not be approved for the loan with a missing partner and you have the added expense of interest. The third option is life insurance. With this option you pay pennies on the dollar.