Life Insurance Coverage

Learning the basics

There are several life insurance options in today’s market, but these can be divided into 2 different types: Term and Permanent life insurance. Below are the most common types of policies but there are also other types. If you think you need a different solution, give us a call and we can help navigate what you are looking for.

Most Common Policy Types

Term Life: This policy type is for a specific time frame (10, 20, 30 years or even longer). Once the term is up, the policy expires, and you will need to reapply for another ‘term’ should you wish to continue coverage. Typically, term insurance offers the greatest amount of coverage for the lowest initial premium and is a good choice for families on a tight budget. There are options to add a spouse or child rider but there is no ‘cash value’ aspect to the policy.

Whole Life: This is considered ‘permanent insurance’ and the simplest and most common option. It provides a death benefit and accumulates *cash value. Premiums remain the same for life, and the death benefit and rate of return on your cash value are guaranteed.

Universal Life: Like whole life, this policy is also considered ‘permanent insurance’ type and provides a death benefit for life. Universal life accumulates *cash value and offers the flexibility of varying the amount of your premium payments. It also offers the certainty of a guaranteed minimum death benefit as long as your premiums are sufficient to sustain it. If you do not maintain those minimum premiums, your death benefit can be reduced.

*Cash Value: A policy’s cash value can be surrendered, in total or in part, for cash that can be put toward important uses. You can also borrow from your cash value at relatively low interest rates and use cash value as collateral. Certain conditions or restrictions may apply to the use of cash value.