Understanding Different Types of Life Insurance

Life insurance can be a crucial part of your long-term financial plan. Understanding your options can help you make an informed decision about which policy may be a good fit for you.

Term Life Insurance

Term life policies provide coverage for a specific period, typically ranging from 10 to 30 years. If you pass away during this term, your beneficiaries can apply to receive a death benefit. If you outlive the term, the policy expires and no benefits are paid. If you need coverage beyond the term, you must renew or purchase a new policy, which may come with higher premiums as you age.

Term life generally offers lower premiums than other types, making it an attractive option for budget-conscious individuals.

Permanent Life Insurance

Permanent life policies provide coverage for your entire lifetime if premiums are paid and typically includes a savings component that accumulates cash value over time. You may be able to borrow against the policy or take a cash withdrawal, depending on the policy’s terms.

There are many types of permanent life coverage, including the following:

• Whole life offers lifelong coverage with fixed premiums and a guaranteed death benefit. It also includes a savings component that builds cash value over time, which can be borrowed against or withdrawn.
• Universal life typically provides flexible premiums and adjustable death benefits. It includes a cash value component, and policyholders can typically modify their coverage as their financial needs change.
• Indexed universal life is like universal life insurance but with cash value growth linked to a stock market index. It offers the potential for higher returns with built-in protection against market losses, though it can be subject to caps and participation rates.
• Final expense insurance is designed to cover end-of-life expenses such as funeral and burial costs and typically features lower coverage amounts and affordable premiums.

Contact Us

Contact James V. Funaro Agency in Bethpage, NY, to learn more about your life insurance options and get a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.