Life insurance is a cornerstone in protecting your family’s well being. Even if you have it, it can get dated quickly. That’s why it is important to review and possibly update your policy with a professional every two years.
The right policy is always a sound investment. It can provide:
- Replacement income for dependents
- Cover burial and funeral costs
- Create an inheritance for your heirs
- Pay federal “death” taxes and state “death” taxes
- Make significant charitable contributions
- Create a source of savings
Types of Life Insurance
Not all life insurance is the same. There are, in fact, two major types of life insurance—term and whole life. Whole life is sometimes called permanent life insurance. It encompasses several subcategories, including traditional whole life, universal life, variable life and variable universal life.
Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions. There are also two basic types of term insurance polices—level terms and decreasing term.
Level term means that the death benefit remains the same throughout the duration of the policy. Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.
Whole life or permanent insurance pays a death benefit whenever you die—even if you live to 100! There are three major types of whole life or permanent life insurances—traditional whole life, universal life, and variable universal life.
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