Life Insurance Options - Quotes on term and whole permanent life insurance


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Resource Center - Life Insurance Overview

Why Consider Life Insurance?

Life insurance provides financial security for your family by providing a lump sum of tax-free money after your death. This money, also called the death benefit, can help your family meet important financial needs by replacing the income you would have provided. Life insurance can also help with expenses incurred at the time of death, such as medical bills, burial costs, and estate taxes. Read on for more information about life insurance, or request a quote at any time.

Term vs. Permanent

The main difference between term life insurance and permanent life insurance is simple: term life insurance covers you for a specific time period, or term, while permanent life insurance covers you for your entire life. There are several types of permanent life insurance - whole life, universal life, and variable life. See Types of Life Insurance for a more detailed discussion of the different kinds of life insurance.

Types of Life Insurance

Term

Term life insurance covers you for a specific period of time, called a term, instead of for your entire life. Common terms are 1, 5, 10, 20, and 30 years. This type of life insurance pays death benefits only if you die during the period of coverage, and does not accumulate cash value. People often purchase term life insurance to cover shorter-term debts like a mortgage or car loan. While term life premiums are usually lower than permanent life premiums, they increase as you get older. Term life can include the option to convert to permanent life insurance in the future.

Permanent

Permanent life insurance covers the entire life of the insured person. Different types of permanent life insurance include whole life, universal life, and variable life. As long as you pay your premiums, your beneficiaries will receive the death benefit when you die.

This type of insurance also combines death benefits with the opportunity to build savings tax-deferred. Part of your premium payments are invested by the insurance company on your behalf. This builds up a cash value, which you can use in several different ways. You can take out a loan against the cash value of your policy, use the cash as extra retirement income, or subsidize expenses like college tuition. You may also be able to cancel, or surrender, the policy and receive the cash value as a lump sum. With all permanent life insurance policies, the cash value is different from the policy's face amount. Cash value is the amount available if you surrender a policy, while face amount is the money paid by the insurance company at your death.

Premiums for permanent life insurance are generally higher than term life insurance because of the cash value. However, the younger you are when you buy the policy, the lower your premiums will be.

Whole

Whole life insurance is in effect for an insured person's entire life. The amount of your premiums generally remains the same over the life of the policy and must be paid periodically for coverage to continue. The insurance company invests part of your premium in its general portfolio to build the cash value of your policy. The most common type of permanent insurance, whole life policies have a fixed guaranteed rate and guaranteed cash values.

Universal

Universal life insurance covers the entire life of the insured, as long as the premiums are paid. Premiums are split two ways: part of the premium covers the cost of the policy, and the remainder is invested in the insurance company's general portfolio to earn interest tax-deferred. This type of insurance usually guarantees a minimum interest rate on the balance that is invested. After your first premium payment, you can pay premiums at any time, in any amount that meets your policy's required minimum and maximum payment. You can also reduce or increase the death benefit more easily than with a whole life policy.

Variable

Variable life insurance is a type of whole life insurance that incorporates investing. You can invest your premiums in the stock, bond, and money market funds you choose from the insurance company's portfolio. While the cash value of variable life policies is not guaranteed, you have control over how your money is invested. The cash value and death benefit of your policy is determined by how well your investments are doing. This type of life insurance usually has fixed premiums.

How can I find out more information?

When you request a quote, you'll be put in contact with a life insurance professional. That agent will help you learn even more about your life insurance options.

Life Insurance Facts

Q: Who should consider life insurance?

A: If you have others depending on you for support, you probably need life insurance to help them cover expenses ... Read More

Q: How much will my premiums be?

A: Premium amounts vary from policy to policy. Because premium rates are generally determined by age, the younger you are when you buy your policy, the lower your rates will be. For more specific information about policy costs, request a quote.