A plain-English guide to the main types of life insurance and how they work.
Life insurance comes in several types, and the paperwork can be confusing. Here's a simple guide to the most common kinds of policies so you can figure out what you have — and an easy way to get it reviewed if you're not sure.
Term life covers you for a set period — usually 10, 20, or 30 years. It's the most straightforward type: if something happens during the term, your beneficiaries receive the death benefit. Premiums are typically level for the length of the term.
Whole life is permanent coverage that lasts your entire life as long as premiums are paid. It also builds cash value over time that grows on a tax-deferred basis.
Universal life is permanent coverage with flexible premiums. Indexed universal life ties cash-value growth to a market index, with a floor to limit downside. These policies are flexible but can be more complex — a good reason to have yours explained.
Final expense is a smaller whole-life policy designed to cover end-of-life costs like a funeral. It often has simplified underwriting and no medical exam.
While not life insurance in the traditional sense, annuities are often part of the same conversation. They're designed to provide guaranteed income, often in retirement.
That's completely normal. The quickest way to find out is to talk to an insurance agent who can look at your policy with you. Give us a call and we'll connect you with an agent who can walk through it in plain English.
An agent can review your coverage and answer your questions.
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