Life insurance covers your family’s needs in the event of your death, from funeral expenses to ongoing financial requirements. There are several types of life insurance that offer different coverage and payment options.
Before you decide which works for you best, you should know how life insurance is typically used: For any immediate needs at the time of death, such as final illness expenses, burial costs and estate taxes; for funds during a readjustment period, to finance a move, or to provide time for family members to find a job; for ongoing financial needs, such as monthly bills and expenses, day-care costs, college tuition or retirement.
Click on the sections below to discover which type of Life Insurance is right for you:
Term insurance provides coverage for a specific period of time. It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of the specified period. Others give you the ability to reenter. The premium rates increase at each renewal date or each reentry. Many policies require that evidence of insurability be furnished at reentry for you to qualify for the lowest available rates.
Initially, premiums are generally lower than those for permanent insurance, allowing you to buy higher levels of coverage at a younger age, when the need is often the greatest.
This is the most common type of permanent insurance. The premiums for a whole life policy must be paid as scheduled in the amount indicated in the policy. These premium amounts remain constant over the life of the policy. The death benefit and cash value are guaranteed as stated in the policy if premiums are paid when due and there are no loans or withdrawals outstanding at the insured's death. Quite often dividends may be credited to this type of policy.
This variation of permanent insurance allows you, after your initial premium payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You can also increase or reduce the amount of the death benefit more easily than under a traditional whole life policy. Typically, current interest rates are credited to the cash value in this type of policy.