Life insurance policies can be categorized into four major types. These are term life insurance, whole life coverage, universal life coverage and endowments.
Term life insurance has a specified premium for a specified number of years. This life insurance does not accumulate any cash value which also means that it has no surrender value. In term life insurance, there are three factors to consider. These are: the policy’s face amount or protection or death benefit; the premium or the cost to the insured; and the length of cover which is also called the term. Many life insurance quotes are available for review among those who intend to purchase this.
Whole life coverage is a life insurance that provides for a level premium. This guarantees death benefits with guaranteed cash values. It also includes known and fixed annual premiums with mortality and expense charges which are not reduced from the cash value that is indicated in the policy. Its downside on the other hand is that it is not flexible and its policy’s internal rate of return is not as competitive as other savings alternatives. Its actual life insurance quote depends on a number of factors.
Universal life insurance provides permanent insurance coverage where its premium payment is flexible. Life insurance quotes on this is of importance among those who seek this type of life insurance. It is a life insurance policy that provides cash account and that its premiums increase its cash account. Its interest is paid within the policy on its account at a specified rate. Its rate is guaranteed at its minimum but it is still usually higher than the minimum mortality charges and administrative costs that are charged against its cash account. Its surrender value is equivalent to the amount that is remaining in the cash account.
Lastly, endowments are insurance policies where the cash value is built up inside the policy which is equal to the death benefit of the policy holder at a certain age. This specified age is known as the endowment age. Endowments are more expensive compared to universal life insurance and whole life insurance because its premium paying period is relatively shorter. Again, life insurance quotes on this depend on several circumstances.
Among all these four major types of insurance, only term life is available in Australia. All the other three insurance policies, the endowment insurance, universal life coverage and whole life insurance, are not available in Australia. Life insurance Australia does not cover these three.