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Understanding the Two Primary Types of Life Insurance

| May 15, 2019
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Many people may think life insurance is just another unnecessary expense without realizing its purpose and benefits. The question to ask yourself is would someone in your life suffer financial hardships if you were to pass away? If the answer is yes, then life insurance is worth considering. The most fundamental step towards understanding life insurance is knowing the differences between the two primary types of life insurance: 

  1. Term life insurance is the simplest and relatively inexpensive way to temporarily protect your family over a “term”, or certain time period. It provides coverage commonly for 10, 20, or 30 years. And if your death occurs within the specified term, your beneficiaries receive the payout.
  2. Permanent life insurance as the name suggests, provides a death benefit for life as long as premium payments are made on time. Whole life, universal life, and variable life are types of permanent life insurance. Unlike term, permanent life policies are more complex because it offers a savings component called “cash value” that grows with interest over time, tax-deferred.

Life insurance can help reduce the financial impact on your loved ones in the event of your death. As your dedicated team, we can help you sort through the many options and design a plan to best meet your needs and expectations. Give us a call today!

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This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company.

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