Life insurance is becoming more and more popularwith many people now realizing the importance and thebenefits of a good life insurance policy. There are twomain types of popular life insurance, both of which offer arange of invaluable benefits to consumers.

Level Term Life Insurance

Level term life insurance is the most popular type of lifeinsurance policy with consumers, and this may be becauseit is also the cheapest form of insurance. With level terminsurance, you and your family can enjoy peace of mind atan affordable price. If you die during the term of thisinsurance policy, your family will receive a lump sumpayment, which can help to cover a number of costs as wellas provide some degree of financial security at what willinevitably be a difficult time. The money could assist withcosts such as:

?Mortgage repayments
?Funeral costs
?Education costs for the children
?Day-to-day living

One of the reasons that level term life insurance is afair bit cheaper than other life insurance is because theinsurer only has to make a payment if the insured partypasses away, and even then the insured party has to dieduring the term of the policy for the next of kin (or thenamed beneficiary) to be eligible for a payout. One of thegreat things about levels term insurance is that you canbenefit from cover for just a few pounds each week, andbecause the payments remain the same throughout the term ofthe policy, you'll never have to worry about risingpayments.

The reason why a level term insurance policy is so calledis because the repayment remain level throughout the termof the policy, so you will never have to worry about thecost of your policy rising. The policy is also taken over afixed term, which is where the 'term' part of the policycomes in. This means that you can enjoy easy budgeting andlow cost repayments, and you'll know exactly how long youwill be making payment for. On the downside, once thepolicy expires you will not be able to reclaim any moneyand the policy will be cancelled, so you will then need tolook at taking out alternative life insurance cover.

The average term of a level term life insurance policy -unless otherwise specified - is fifteen years. There are avariety of factors that contribute to the cost of thepolicy such as whether you go for the most basic package orwhether you include a bolt-on such as critical illnesscover, whether you are a smoker, your general health, and

the term over which you take the policy out.

Whole Life Insurance

Unlike level term life insurance, whole life cover offersa guaranteed payout, which to many people makes it bettervalue for money in the long run. Although the repayments onthis type of cover are more expensive than level terminsurance, the insurer will make pay out whenever theinsured party passes away, so the higher monthly paymentswill guarantee a payout at some point.

There are a number of different types of whole lifeinsurance policies, and consumers can select the one thatbest fits their needs and their budget. As with otherinsurance policies, you can tailor-make your whole lifeinsurance cover to include additional cover such ascritical illness insurance. The variations on whole lifeinsurance cover include:

Non-profit whole life insurance policies: This is thesimplest form of whole life cover, and enables you to enjoythe convenience of level payments through the term of thepolicy until you die. Upon death, your family received apayout and the policy becomes null and void. If you want topay a little extra, you can take out a policy that is fixedover a specified term, which means that you will only bemaking payments for a certain amount of time, but yourfamily will still receive a payout when you die.

With-profit whole life insurance: This is a cover andinvestment type scheme, where your monthly payments aresplit between your cover premiums and the investment sideof your policy. You will enjoy a guaranteed assured sum,and you may find that your insurer adds discretionarybonuses.

Low cost whole life insurance: One of the cheapestforms of whole life cover, this type of policy features adecreasing term plan, and the policy is combined with aprofits fund. As bonuses are added to the profit side ofthe policy, the policy term decreases. This provides a costeffective solution for those that want to enjoy thebenefits of whole life insurance cover without having tomake high monthly payments.

Unitised whole life insurance policy: When you purchasethis type of whole life cover, you will also be investingin with-profit units. This means that when the insurermakes a payout, the sum awarded will be dependant upon thevalue of the units in comparison to the value of the deathbenefit (the payout will be based upon whichever is thehighest in value). Each month units are cancelled in orderto increase levels of death benefit cover, with reviewscarried out from time to time to ensure adequate levels ofdeath benefit cover.

Summary

Both level term insurance policies and whole life policiesoffer valuable peace of mind to policyholders. The cost ofthis type of life cover is a small price to pay for thepeace of mind that comes with being protected, and you canincrease this peace of mind by adding extras such ascritical illness to your policy for just a small extra fee.

As a nation, we like to insure just about everything wecan - our cars, our homes, our belongings, our pets, and evenour credit repayments. It therefore makes sense that weshould insure the most important thing of all - our lives.

Claire Bowes is a successful freelance writer and owner ofhttp://www.a1-life-insurance-quotes.co.uk where you will find further information and advice on all aspects of life insurance policies, mortgage protection and critical illness cover.