Understanding the Types of Life Insurance in Detail

Term Life Insurance

• How It Works: You choose a term length (e.g., 10, 20, or 30 years). If you pass away during this period, your beneficiaries receive the payout. If the term ends and you’re still alive, there is no payout, and the policy expires.
• Best For: People who need coverage for a specific period, like until their children are grown or until a mortgage is paid off.
• Cost: Generally the most affordable, as it doesn’t build cash value and is only temporary.

Permanent Life Insurance Types

• Whole Life Insurance: Provides a death benefit for your lifetime and has a cash value that grows at a guaranteed rate. The premium is fixed for the life of the policy.
• Universal Life Insurance: Offers flexibility in premium payments and death benefits. The cash value grows based on a market interest rate set by the insurer.
• Variable Life Insurance: Allows you to invest the cash value in various investment options, like mutual funds. The death benefit and cash value vary with the investment performance.
• Best For: People looking for lifelong coverage and those interested in building cash value as part of their financial plan.