Louisville, Kentucky
1491 Old Preston Hwy North
Louisville, KY 40229
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Three Main Types of Life Insurance December 27, 2018

Louisville, Jefferson
Three Main Types of Life Insurance, Louisville, Kentucky

The point of life insurance is to leave something behind for your family if you pass away. It will replace your regular income, supplying loved ones with financial stability. Navigating policy options can be confusing, especially if you’re purchasing yours for the first time or are considering changing policies. Knowing what types there are will help you make your decision.

Purchasing Life Insurance for the First Time? Here are Three Types


This kind of insurance is what it sounds like: it lasts for a specific time window. The usual periods are five, 10, 15, 20, 25, or 30 years. You’ll make regular payments toward the policy during this time, and if you pass away while covered, your family will receive a check for the amount of whichever policy you purchased.

Term policies are among the cheaper and less complicated options. Depending on the details of your specific policy, it’s likely that you’ll only pay a fixed rate for the entire time. On the downside, if you outlive your policy, you’ll need to purchase a new one, and you won’t get anything back for those years of payments.

Whole Life

life insuranceNo matter when you pass—be it five years or fifty—your family will receive the payout under a whole life plan. You should also think of whole life policies as investments: in addition to the payout, they accrue cash value throughout the years, much like a savings account.

Because of this added feature, whole life policies are quite a bit more expensive than term policies. Additionally, the cash value accrual rate isn’t as high as it would be if you paid that same amount into a mutual fund, so keep that in mind when making your decision.

Whole Life Universal

Similar to a whole life policy, this covers you for your entire life, and it also accrues a small amount of cash value. This policy is more flexible than whole life, however: the premiums are adjustable, so you might be able to alter your yearly payments over time. Many people find this beneficial, but the downside is you’ll have to be very careful about making all payments on time; if you’re late even once, you could forfeit the policy completely, along with all the money you’ve already paid into it.


If you’re still scratching your head about what type of policy you should purchase, let the experts at Hamilton-Martin Insurance Agency help make it simple. Located in Louisville, KY, they’re an independent insurance agency focused on helping clients find the best options for their needs, whether that means life insurance, homeowners insurance, or auto insurance. Learn more today about their services by visiting them online or calling (502) 957-6500.

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