Life insurance is a financial tool that allows you to protect your family and loved ones when you’re gone. There are many types, short and long term, that are aimed at meeting your specific needs and preferences. Below is some information on life insurance sold to individuals. Contact us today to learn more about company life insurance.
Term insurance is a straightforward type of life insurance that only lasts for a predetermined number of years before expiring. You choose the term when you take out the policy. Common terms are 10, 20, or 30 years.
The death benefit stays the same throughout the duration of the policy.
The death benefit drops, usually in one-year increments, over the course of the policy’s term.
Permanent life insurance is a policy that does not expire. The two primary types of this are whole life and universal life, both of which commonly combine a death benefit with a savings portion when the individual passes away.
Whole life insurance offers coverage for the full lifetime of the insured and has a premium that is intended to remain constant for the course of the policy. As the insured person ages, the cost per $1,000 of benefits rises, and it obviously becomes quite high when the insured person lives to be 80 or older. In order to maintain the level premium, the firm first charges a premium that is more than what is required to pay claims. This money is then invested and used to augment the level premium to assist in covering the cost of life insurance for older individuals.
Along with a death benefit, universal life insurance also provides a savings component, but it has a variety of premium structure options and pays out according to market performance.
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