Types of Life Insurance

Life insurance plans provide funds that can be used to cover major expenses, such as mortgages or college tuition, as well as monthly bills and day-to-day living expenses. If your spouse would need to start a new job or increase work hours, the money could also help pay for childcare expenses.

Term life insurance and whole life insurance are the most common types of life insurance products.

The amount of coverage you will need will determine the price of the product. We offer both affordable life insurance products and premium, more expensive products which can also act as an investment account.

Once a life insurance company is notified of a death, they will begin the process of setting up a payout to beneficiaries, who are named by the policyholder when the policy is created.

Payout options include lump sums, installments, annuities and retained asset accounts. Talk to your insurance agent about payout options when selecting your policy.

Different types of
Life Insurance

Life insurance is divided into two categories:

Permanent Life Insurance

Universal life insurance and whole life insurance are types of permanent life insurance policies, which means they provide a lifetime of coverage and accumulate a cash value that you can borrow against.

Term Life Insurance

Life insurance companies also sell term life insurance. These policies are limited to a set period and paid out if the policyholder dies during that coverage time.

Term Life Insurance

Term life insurance covers you for a particular number of years – 10 years, 15 years, 20 years – whatever timeframe you determine works best for your circumstances.

Term life policies are less complicated and more affordable than permanent life insurance policies.

With a “level term life” policy, you’ll pay a set amount per month or year for the duration of the policy. The healthier and younger you are when you take out the policy, the less you will pay in monthly premiums.

Term life insurance policies expire at the end of the set term. At that point, you do not receive a payout. Think about it like car insurance. When you no longer need it, you cancel your policy, and the financial agreement ends. However, some people will opt to convert term policies into a permanent policy when it expires.

Consider Term Life Insurance if:
  • Your loved ones would need help paying for day-to-day expenses if you were to pass away

    This includes groceries, credit card charges, childcare, school/activity costs and other household bills.

  • Your children would need help paying for college
  • You have a mortgage or other significant loans, such as car loans
  • You have a retirement savings strategy

Whole Life Insurance

Whole life insurance and universal life policies are more complicated than term life. They also don’t expire. The policy remains intact as long as you pay for it. If you cancel it, you will receive the cash value of your policy, minus any fees. If you maintain it throughout your life, your loved ones or charities will receive a payout after you pass away.

Permanent insurance policies become more valuable over time as your “investment” grows. Because of this, the monthly premiums can be up to 20 times more expensive than term life insurance.

Whole life policies have a fixed premium so you pay the same amount every year. Your insurance plan will put part of your premium into a high-interest bank or savings account. You can borrow from it or surrender the policy for cash if you have a financial emergency.

Universal life policies offer a bit more flexibility because the policyholder can vary the amount of the death benefit and, therefore, the premiums they pay. However, the policy still accumulates interest and has a cash value. Some policyholders use the cash value of the insurance to pay their premiums.

Consider Whole Life or Universal Life if:
  • Want to grow the value of your insurance
  • Prefer to have coverage that lasts a lifetime
  • Would like a cash value component to the insurance that can be taken out later
  • Can afford more expensive premium payments
  • Want life insurance to be part of your long term-financial strategies

Final Expense Insurance

When a family is grieving, the last thing they want to figure out is how to pay for a funeral.

The national median cost of a funeral with viewing and burial in 2019 was $7,640, according to the National Funeral Directors Association. Cemetery fees and markers will add to the expense. Funeral or final expense insurance can cover these costs for your family.

Besides the funeral and burial costs, this type of insurance can also cover medical bills, credit card debt and other end-of-life expenses.

Some life insurance policies will cover this. If you have a term life policy, your loved ones can use the payout to pay for your funeral. If you have a term life policy, your loved ones can use the payout for your funeral.

If you do not have a life insurance policy, you can also get a separate policy to cover funeral/final expenses.

Our “guides” are ready to talk about your life insurance options and life insurance costs. We want to put you at ease in finding the best policy for you and your family. Call 1-888-414-4547 for more information.

When figuring out which route to take, we can help you calculate the amount of coverage you will need, depending on your situation and goals. You will also likely be required to take a medical exam depending on your age, health and the coverage amount you’re seeking.