Types of Life Insurance

Life insurance is a contract with an insurance company that says in exchange for your premium payments, they will make a lump sum payment to your named beneficiary. The beneficiary is usually a spouse, children or another named family member. A life insurance policy is especially important if your family depends on your income.

There are two types of life insurance: Term Life Insurance and Permanent Life Insurance.  Here are some key points highlighting each type of life insurance policy. 

Term Life Insurance

·      Life insurance for a specific amount of time-coverage ends at a desired amount of time, such as 10, 20, or 30 years

·      Low cost-the most affordable type of life insurance

·      Level benefit-if you pass away during the term of your policy, your beneficiary can make a claim to receive the payout

·      Level premium-payments remain the same

·      No cash value or equity

·      Upon expiration, the policy can be renewed, or you can review other options

·      It is convertible to Permanent life insurance

·      You can add riders for additional coverage options (coverage for children, spouses; waiver of premium for disability; accelerated benefits)

Permanent Life Insurance

·      Life insurance providing lifelong coverage-coverage never ends

·      More expensive

·      Level benefit

·      Level premium

·      Builds cash value that you can borrow against

·      You can add riders for additional coverage options (coverage for children, spouses; waiver of premium for disability; accelerated benefits)

Additionally, there are a few types of permanent life insurance policies:

·      Whole Life Insurance-your premium payments are fixed with a guaranteed death benefit, cash value growth and some potential growth

·      Universal Life Insurance-your premium payments are flexible and can be changed. There is a guaranteed death benefit as long as your premium payments cover the benefit amount.

·      Variable Universal Life Insurance-variable premium with options for subaccount investments for potential cash growth 

How Much Coverage Do I Need?

Now that you have made the decision to get a life insurance policy, you must to decide how much coverage you need. When making that decision, consider the following:

·      The needs and priorities of your family (mortgage/rent, daily living expenses, education expenses, etc)

·      How many people do you need to provide for? (this list may include spouse, children, siblings, parents, etc)

·      How long will those beneficiaries need financial support? And do any of them have special needs or disabilities?

·      All your debts, loans, and financial requirements

·      How much savings do you have?

·      Will your spouse need assistance with retirement funding?

WOW! That’s a lot of information. Here is the best part-our Advisors are here to assist you! We will walk you through the entire process and make sure you get the best policy for your needs so you can rest easy knowing you have set your loved ones up with financial stability.



The Advisors Insurance Agency team aims to make sure our clients and their families are protected from risk.

Contact us today to make an appointment to discuss your life insurance options.