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Types of Life Insurance

Types of Life Insurance

Life insurance comes in many shapes and sizes, but there are two types of life insurance policies: term life insurance and permanent life insurance. They both do exactly what it sounds like they do.  Term insurance offers coverage for a specific period of time and pays the face amount of the policy if the person insured dies during that “term.”  Permanent life insurance usually has no fixed time limit; as long as the premiums are paid, the benefit will be paid no matter when the insured dies.

Watch the video below to understand the types of life insurance better.

Take a look at this chart to better understand the two main types of life insurance:

Term Life Insurance      
      Permanent Life Insurance
Guaranteed Level
Whole
Return of Premium
Universal
Annually renewable
Survivorship or 2nd-to-die
 

Key Differences:

      Term Life Insurance
      Permanent Life Insurance
Coverage
Temporary
For life
Expiration
Predetermined period of time
Until the death of the insured
Cash Value
No cash value
Potential long term savings

 

Types of Term Life Insurance Policies

Term life insurance, which is the most affordable policy available, is designed to meet your temporary needs by providing protection for a specified period of time the term (for example, a term of 10, 20 or 30 years). This policy makes sense if you have financial needs that will diminish over time, such as a home mortgage or your child’s tuition.

Each year, a premium is paid to cover the risk of death during that year. It has no cash value. The only way to collect anything is to die before it expires. If death occurs, the life insurance beneficiary collects the death benefit of the policy. The money issued is generally free of federal income taxes.

Learn more about the different types of term life insurance.

Types of Permanent Life Insurance Policies

Permanent life insurance policies provide lifelong protection. As long as you continue to pay the premiums, coverage will continue and the death benefit will be paid when you die. Permanent life insurance also provides a savings element; these policies accumulate a cash value over a long period of time.

Learn more about the different types of permanent life insurance.

In addition to traditional term life insurance and permanent life insurance, there are several other types of life and health insurance available. Click on the different kinds of life and health insurance policies below to learn more.

Is one type of life insurance being better than the other? That depends on you. The type of life insurance product that suits you best depends on your personal, family, physical and financial circumstances.

You may also like to learn more about life insurance riders in the video below:

You may also like to check out our page on life insurance riders.

Any questions? Call us at 800-442-9899 to speak with one of our experienced professionals. Or, if you prefer, you can get you free quote by clicking the “Get Started” button below.

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