The Facts of Life
Term Life
Term Life Insurance last for a certain number of years, with the typical terms being 10, 20, or 30 years from the date you take out the policy.
Common term policies are:
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Decreasing Term
- This policy is renewable, and its coverage decreases over the policy's life.
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Convertible Term
- This policy allows the policyholder
to convert it from a term policy to a permanent policy.
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Renewable Term
- These policies are typically the most affordable in the beginning, and their policy premiums increase annually throughout the policy term.
Permanent Life
Permanent Life Insurance stays in effect for the duration of the insured's life, unless they surrender the policy or stop paying the premium. These policies are typically more expensive than term life policies.
Common permanent policies are:
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Whole Life
- This type of permanent insurance accumulates cash value that the insured can use as a source for loans, cash, or to pay policy premiums.
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Universal Life
- This permanent life policy includes a cash value component which accrues interest. It has flexible premiums that can be adjusted over time, and the death benefit can either be level, or increase over the years.
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Indexed Universal Life
- This universal life policy allows the policyholder to earn either a fixed or equity-indexed rate of return on its cash value component.
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Variable Universal Life
- This universal policy allows the policyholder to invest the policy's cash value into a separate available account. Variable Universal policies have flexible premiums, and either a level or increasing death benefit.
Life Insurance Riders
These are "add-ons" that can prove helpful when purchasing a life insurance policy.
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Accidental Death Benefit Rider
- This provides additional coverage if the insured's death is accidental.
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Waiver of Premium Rider
- This removes the burden of paying the policy's premium if the insured becomes disabled and is unable to work.
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Disability Income Rider
- This pays the policyholder a monthly income should the insured become unable to work for several months or longer due to serious illness or injury.
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Accelerated Death Benefit Rider
- This allows the insured to collect either part of, or the full amount of, the death benefit upon receiving a terminal diagnosis.
There are additional riders which our knowledgeable experts can be help you add to your policy, but this list covers a few of the major ones.
How much life insurance do I need?
Determining the amount of life insurance you need involves analyzing a few variables. What expenses would need to be covered in the event of your death?
Do you have a mortgage and other recurring monthly bills?
How much would be needed to cover funeral expenses?
Do you have children who will one day need funds for college tuition?
Lastly, do you have monthly income that your spouse or loved ones will not be able to adequately replace in your absence?
All of these considerations are important when deciding the appropriate amount of coverage you should carry.