Life Insurance 101
What is life insurance?
Simply put, life insurance is a way to provide financial protection for your loved ones in their most vulnerable moments. A life insurance policy ensures that if you die while your policy is active, your loved ones will receive a lump-sum payout, known as a death benefit. The death benefit can be used to cover things like mortgage or rent payments, education costs, funeral arrangements, and more.
What type of life insurance is right for me?
Permanent and term life insurance are the two main types of individual life insurance. When choosing between the two, consider how long you want coverage, the purpose of the coverage, and how much you want to pay. Here's a brief overview of each to help you decide which one may be the best fit for you and your family.
Permanent (whole or universal) life insurance
As long as the premiums are paid, this type of coverage is active for your whole life, guaranteeing the eventual payout of a death benefit. It can cost 5-10X more, but if the premium is within budget, it can be a good option for anyone interested in insurance that accumulates cash value and doesn't end.
Term life insurance
Term policies last for a specific amount of time (your term), and there is no cash value accumulation. The death benefit is only payable to the beneficiary upon the insured person's death during the term. Because it costs less and is more straightforward, it's a good option for many people.
