Now that you have understood the importance of life insurance and what it's all about, why, when and for what it's used? It's equally important to understand the types of life insurance covers, which are available in the market, how they are different from each other, what do they basically offer and does it fit your requirements that you have listed down, when shopping around for life insurance.

Although, there are so many insurance companies that offer so many different types of life insurance covers, that are customized to meet your requirements; it's surprising to know that there are basically only 6 types of life insurance covers:

• Endowment Life Insurance: - The endowment life insurance pays the policyholder an income or a sum of money, if the person lives to a certain age. In case, the policy holder passes away before the life insurance cover (years or age limit mentioned) matures then the death benefit would be issued to the beneficiary.
• Term Life Insurance: - This type of life insurance provides coverage for a fixed period of term and a fixed rate of payment. After the period is complete, the coverage does not remain the same. This means that the policy holder should either take more coverage with different payment and coverage or forgo the coverage. If the policy holder passes away before the term matures, the beneficiary is paid the benefits. This is the best and the least expensive method of purchasing a death benefit on a coverage basis over a period of time.
• Variable Life Insurance: - This life insurance cover protects the policy holder and provides death benefits to the beneficiary upon the death of the policy holder. However, the risk involved in this type of cover is that it is based on the performance of the investment section of the policy which could fluctuate. This type of insurance is a kind of whole life insurance which is regulated as securities under the Federal Securities Laws because of the investment risks involved.
• Whole Life Insurance: - With this type of insurance the policy remains for the life time of the policy holder and the premiums have to be paid every year to the policy.
• Variable Universal Life Insurance: - This type of insurance is also known as VUL. This life insurance is built on cash value. The amounts can be invested in different type of accounts that are similar to mutual funds. The choice for the usage of these separate accounts depends totally and entirely on the policyholder who is mostly the contract owner.
• Universal Life Insurance: - This type of insurance is also known as UL. This insurance is a sort of life insurance that is permanent and has cash value as its base. In this policy the agreement is in such a way that if the premium payments are above the cash value of the policy, the value of cash amount is credited back on to the policy. The value of the cash with interest has to be credited, and the cost of insurance charge every month is debited along with fees and policy charges that are drawn from the cash value if no payments for the premium are made that month. The insurer determines the interest that is credited to the account.

Mentioned above are majorly the 6 type of life insurance covers that are provided, however, keep in mind that it is always best to list what you expect from your life insurance cover and speak to a representative about it.