Types of Life Insurance Policies Available in North Carolina

When exploring life insurance options in North Carolina, it’s crucial to grasp the distinctions among the various policies available: term life, whole life, universal life and variable life insurance. Each policy type offers unique characteristics, advantages and disadvantages, catering to different needs.

Types of Life Insurance Policies

The following are common types of life insurance policies:

• Term life insurance can offer coverage for a specific period, typically 10, 20 or 30 years. It’s typically the most affordable option, making it popular with young families or individuals with temporary financial obligations, such as a mortgage. The main advantage is its low cost, but it lacks a savings component and expires without value if the policyholder outlives the term.
• Whole life insurance can offer lifelong coverage with a savings component known as cash value, which can grow at a guaranteed rate. This policy is typically more expensive than term life but offers a death benefit regardless of when the policyholder dies. It’s suitable for those seeking long-term financial security and a guaranteed return on investment. However, the high premiums can be a drawback.
• Universal life insurance can offer flexibility, enabling policyholders to modify their premiums and death benefits. It generally includes a cash value component that accrues interest. This adaptability makes it ideal for individuals with fluctuating income levels or evolving financial requirements. However, it requires active management and can be more complex than other types.
• Variable life insurance can combine lifelong coverage with investment options for the cash value component. Policyholders can invest in various sub-accounts, similar to mutual funds, potentially increasing the policy’s value. This policy is suitable for those comfortable with investment risks and seeking higher returns. However, it typically comes with higher fees and the risk of losing money if investments perform poorly.

Learn More

For life insurance near you, contact Willis Insurance.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.