Four Types of Life Insurance

When shopping for life insurance in Hawaii, it's important to keep your family's needs in mind and remember that you are not limited to just one policy. In fact, you may decide to get both a whole life and a term life policy in order to maintain the right amount of coverage to protect your family.

In the life insurance business in Hawaii, four commonly used types of insurance are available for your needs: whole life, term life, universal life, and variable universal life.

Term Life Insurance

At its most basic, Hawaii life insurance companies offer term life insurance. This type of policy is valid for a set period of time, which can vary anywhere from one to thirty years. The policyholder pays a regular premium the whole time coverage is in effect. If the insured dies while the policy is still in effect, the beneficiary receives the benefit. On the other hand, if the term expires and the insured is still alive, no money is paid out under the policy.

Whole Life Insurance

One of the most popular forms of life insurance in Hawaii, whole life insurance has been around for a long time. As premiums are paid on the policy, the insured accrues a cash value under the policy. The insurer applies an interest rate to the cash value, and the insured may either maintain his the policy for the benefit of his or her family, or may redeem the policy for its cash value at any time. Naturally, you should do so carefully, as sometimes the payout is better after a certain number of years, and cashing out prior to that time could cause you to lose a substantial sum of money.

Universal Life Insurance

When you want a more flexible type of life insurance, universal life may be the type of policy that will meet your needs. The regular premium can fluctuate, but the policy must have a cash value higher than its cost. The cash out amount can be changed by the insured throughout the life of the policy, so this is a great choice for people who may have complex insurance needs that cannot benefit as well from a whole life policy.

Variable Universal Life Insurance

Very similar to universal life, the added benefit of variable universal life insurance is that investment options are provided to the insured. When paying the premiums, the insured distributes those premiums among the investment options provided. The value of the policy is then based on how well those investments perform.

When you are examining the types of life insurance options available to you in Hawaii, be sure to look at the advantages and restrictions of each type of policy in order to decide which plan is best for you and your family.