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Young parents and married couples often start out with term life insurance. Term life insurance is very affordable, and it can offer substantial death benefits at relatively low rates. Yet term life insurance doesn’t build cash value. If the only insurance you have is term life insurance and you can now afford a cash value policy, it’s worth considering investing in this alternative type of insurance. Cash value insurance policies are slightly more complex than term life policies, but most fall into a few general types. The cash value insurance policy that is right for you will depend on several factors, including your budget and your family’s long-term financial goals.
When you start shopping for a cash value life insurance quote, one of the types of policies you’ll encounter is whole life insurance. Whole life insurance guarantees a death benefit as well as cash value for the insured.
Another type of cash value insurance is universal life insurance. As you’ll discover when you obtain a life insurance quote for this type of policy, you’ll enjoy the benefits of variable universal life insurance, plus a secure cash value rate of return that is fixed.
Variable universal life insurance is ideal for those who are looking for a very flexible insurance option. You can choose your investment options with this type of insurance, so you have some control over how the money you will build cash value with is invested. Variable universal life insurance does involve a higher rate of risk than some other types of cash value policies, such as whole life and universal life insurance.