There are two primary types of life insurance:
Term: This is temporary life insurance. You purchase coverage for a specific price that covers you the number of years you elect. If you die during that time, you beneficiary receives the value of the policy.
Increasing/decreasing The death benefit increases or decreases, usually in one year increments over the course of the policy. Choose an increasing term that’s annually renewable, if the length of the policy is less than four years. Level Premiums and coverage are fixed over a certain period. If the length of the policy is longer—5, 10 or 20 years—choose a level term policy.
Permanent: As the name implies, permanent lasts until you fail to make a payment, and provides your beneficiary with a death benefit regardless how long you live.
Traditional Whole Life A type of permanent life insurance, whole life covers you for your entire life and both the premiums and death benefit remain the same. If you pay the premiums, this policy won’t expire. When you’re younger, you are charged a premium that is slightly higher than you’d pay for a term policy. The insurer invests the excess money and uses it to supplement the cost of your insurance as you age.
Universal Life This type of policy works overtime, as life insurance and an investment vehicle. You can choose to pay any amount over your premium, and the excess will be invested. Your earnings will be placed into a savings account, which you can use toward future premiums or allow it to grow.
Variable Life This kind of policy also has a cash value component and works pretty much the same as universal life insurance, allowing you to use your returns of investment to offset your premiums or to build up in your account. However, variable life offers a wider array of investment products, such as stock funds, and also a higher risk. If your investments don’t perform, you cash value and death benefit could decrease.
Once you determine what type of insurance is right for you, use a non-biased third-party lead service to request quotes from local insurers, agents and/or brokers.