What is
Life Insurance?

Life insurance is a contract between an individual (the policyholder) and an insurance company, where the insurer promises to pay a designated beneficiary a sum of money (the death benefit) upon the death of the insured person. The policyholder pays regular premiums to the insurance company to keep the policy active. Life insurance is designed to provide financial protection for the policyholder’s beneficiaries in the event of their death.

Comercial Auto Insurance

What Are the Main Types of Life Insurance?

Term Life Insurance:

  • Provides coverage for a specified term (e.g., 10, 20, or 30 years).
  • The death benefit remains constant throughout the term.
  • Premiums are typically lower compared to permanent life insurance.
  • Some policies can be renewed at the end without a medical exam, but premiums will go up substantially.
  • Some policies allow the policyholder to convert the term policy into a permanent life insurance policy without a medical exam.

Final Expense Insurance (Burial Insurance):

  • Provides a modest death benefit, usually ranging from $5,000 to $50,000, to cover the costs associated with a person’s funeral, burial, or cremation.
  • Provides coverage for the entire life of the insured.
  • Often chosen by those looking for a simple and affordable way to ensure their final expenses are covered.

Whole Life Insurance:

  • Provides coverage for the entire life of the insured.
  • Premiums remain level throughout the policyholder’s life.
  • Accumulates cash value over time, which can be borrowed against or withdrawn.

Universal Life Insurance:

  • Offers flexibility in premium payments and death benefits.
  • Includes a cash value component that earns interest based on market rates.
  • Allows the policyholder to adjust the death benefit and premium payments within certain limits.

Variable Life Insurance:

  • Combines death benefit protection with the opportunity for investment growth.
  • Policyholders can allocate premiums among various investment options (e.g., stocks, bonds).
  • The cash value and death benefit can fluctuate based on the performance of the chosen investments.