Term life insurance
Term life insurance is a policy that guarantees payment of a stated death benefit if the covered person dies during a specified term. The term of your insurance coverage begins on the date the policy is issued. Provided you pay the required premiums, the coverage will remain viable until the end of the term. Term lengths typically include 10, 15, 20, 30, and 40 years.
Learn more about term life insurance.Permanent life insurance
Permanent life insurance is actually an umbrella term for policies that will offer coverage permanently, as long as premiums are paid and up-to-date. Permanent life insurance provides a death benefit, and it has a savings element as well. There are two primary types of permanent life insurance: whole life and universal life.
Learn more about permanent life insurance.Whole life insurance
Whole life insurance policies guarantee payment of a death benefit in exchange for level premium payments. Another way to define whole life insurance is that it’s a life insurance policy guaranteed to remain in force for the insured’s lifetime or to a maturity date, as long as required premiums are paid. It is designed to provide coverage for the life of the insured.
Learn more about whole life insurance.Universal life insurance
Universal life insurance combines death protection with a cash value element. One of the most attractive features is the flexibility of its payment structure — the policyholder can increase or decrease the amount they pay towards premiums. If you decide you want to have a lower premium, you have the difference withdrawn from your policy’s cash value.
Learn more about universal life insurance.Variable life insurance
Variable life insurance is a type of permanent life insurance coverage that lasts your entire life. The investment portion of the policy isn’t taxed while it’s growing, and the death benefit of a policy is paid out tax-free to your beneficiaries. Though it offers financial protection for a policyholder’s heirs, variable life is most often bought for its cash value accumulation feature.
Learn more about variable life insurance.Variable universal life insurance
Like whole life and universal life, variable universal life is a type of permanent life insurance, meaning that as long as you continue to pay your premiums, your beneficiaries will receive a death benefit when you pass away. Similar to whole life and universal life, VUL also has a cash value component that grows with each premium payment you make.
Learn more about variable universal life insurance.Indexed universal life insurance
Indexed universal life insurance is a type of permanent life insurance. This simply means that in addition to a death benefit for your loved ones when you die, it also incorporates a cash account benefit that can earn interest. Just like you'd invest in index funds through a broker, your insurer invests your money in a stock market index like the S&P 500 or the Dow Jones Industrial Average.
Learn more about indexed universal life insurance.Final expense life insurance
Final expense life insurance, or burial insurance, is a form of permanent life coverage designed to pay for all costs associated with a funeral. This may include the cost of the funeral home, memorial service, embalming, casket, cremation, urn, burial plot, and more. Buying final expense life insurance typically does not require a medical exam.
Learn more about final expense life insurance.Individual life insurance
Individual life insurance aims to meet the financial needs of your surviving spouse or family members when you, the insured individual, die. Individual life insurance offers a death benefit for your beneficiaries and can help them cope financially after your death. Individual life insurance involves one policy paid by one person — you — and only covers one individual — you.
Learn more about individual life insurance.Group life insurance
If you have a full-time job, there’s a good chance you have the option of getting life insurance coverage as part of a group plan. Participating in a group plan is a good way to supplement your coverage at a reasonable cost. Therefore, if it’s offered by your employer, you should sign up. But you should also own an individual policy to ensure that you have adequate coverage.
Learn more about group life insurance.Burial insurance
Burial insurance usually refers to a whole life insurance policy with a death benefit. It's a long-lasting benefit that remains until you die. It won't expire unless you stop paying the premiums. You may choose to buy this type of insurance to help your loved ones pay for funeral and burial costs for yourself or your family members upon your (or their) death.
Learn more about burial insurance.Voluntary life insurance
Voluntary life insurance has employee eligibility requirements for participation, such as requiring an employee to work over 30 hours per week. Employees can purchase coverage in increments of $10,000 or as a multiple of their salary. There are two types of coverage offered in voluntary life insurance plans: voluntary term life and voluntary permanent life.
Learn more about voluntary life insurance.Supplemental life insurance
Group life insurance is a great benefit, but it may not provide sufficient coverage if you have a family or other people who rely on your income. Here are some of the particulars about group life coverage that will help you decide if you should enroll in your employer’s plan — and if you need a supplemental policy, too.
Learn more about supplemental life insurance.No medical exam life insurance
As its name suggests, no exam life insurance's main advantage is that you do not have to undergo a pesky paramedical exam. Another benefit is that you can be issued a policy in a shorter amount of time because it often takes weeks to schedule a medical exam and additional time for the insurance company to receive and analyze the results.
Learn more about no medical exam life insurance.Return of premium life insurance
A return of premium life insurance policy is term life insurance with a twist: if you outlive the policy term, the insurer will return all of the premiums you paid them. Your premiums are paid back to you after the policy term ends, like 5, 10, 20, or 30 years. For that reason, almost all ROP life insurance policies are term life insurance policies, rather than permanent life policies, which are typically purchased to provide you protection for life.
Learn more about return of premium life insurance.Guaranteed issue life insurance
Guaranteed issue life insurance (GIL) is a type of permanent insurance policy that doesn't require medical underwriting by the life insurance company. Because it requires no medical exam and needs no answers to medical questions to qualify, a policy can be issued in a short amount of time, compared to a traditional, fully underwritten permanent life insurance policy.
Learn more about guaranteed issue life insurance.Survivorship life insurance
Survivorship life insurance, also known as “second-to-die life insurance,” is a type of insurance that insures two people instead of just one. Although they can be term life insurance policies, most joint life policies are permanent life insurance policies, which last your entire lifetime and often have a savings component known as “cash value.”
Learn more about survivorship life insurance.Million-dollar life insurance policy
To understand why one needs $1 million of life insurance, it helps to understand how experts calculate a person’s need for coverage. There are a number of templates, calculators, and rules of thumb available. One commonly held belief in the industry is that adequate life insurance equals 6 to 10 times your current annual salary. That means if you earn between $100,000 to $167,000, under this guideline you should have a $1 million policy.
Learn more about buying a million dollar life insurance policy.Mortgage life insurance
Mortgage life insurance (also called mortgage protection insurance) pays off the unpaid balance of your mortgage should you die. Many banks and mortgage lenders offer mortgage life insurance. Normally, you choose the beneficiary of your life insurance policy, but not with mortgage life insurance, which is why lenders like it — they’re the beneficiary of your policy.
Learn more about mortgage life insurance.Credit life insurance
Credit life insurance is a type of credit insurance that pays off your loan if you die before the debt is settled. The policy’s face amount is tied to the loan amount; as you pay off the loan, the face amount will decrease. If you die before paying the loan balance, the life insurance policy will serve to repay the outstanding debt.
Learn more about credit life insurance.Life insurance riders
Most insurers offer a menu of optional benefits to enhance your coverage. Depending on your individual scenario, you may be interested in all, some, or none of these options. Keep in mind that many of these options will add to the cost of your insurance. Therefore, it’s important to understand what each rider offers and how it may potentially benefit you.
Learn more about life insurance riders.Life insurance with critical illness
A critical illness rider — like a standalone critical illness insurance policy — will cover a predetermined list of conditions. The most commonly covered illnesses include cancer, heart attack, and stroke. Some riders may also cover other conditions like paralysis, Alzheimer’s, bypass surgery, angioplasty, kidney failure, or an organ transplant. You should always consult with the insurance company regarding the illnesses it covers prior to purchase.
Learn more about life insurance with critical illness coverage.Life insurance with long-term care
Since there’s a high probability that we’ll need long-term care at some point in our lives, and there’s a 100% certainty that we’re all going to die, some life insurance companies have had the foresight to combine benefits for both events in one life insurance policy. This can be done by adding an optional long-term care rider to your life insurance policy for an additional cost.
Learn more about life insurance with long-term care coverage.Life insurance with living benefits
Other than cash value, most life insurance living benefits are designed to provide coverage for serious health issues. Many of these living benefits will provide you a portion of your death benefit if certain health circumstances occur. Unlike cash value, these benefits are available on term life insurance as well as on permanent policies.
Learn more about life insurance with living benefits.
