Which Type of Life Insurance Policy is Right for You?

When choosing a Type of Life Insurance Policy you usually have two main choices - Term Life Insurance and Permanent (Whole) Life Insurance.

Term life insurance provides you and your family with protection for a specified period of time, usually from one to 30 years. It pays your beneficiary a death benefit (the face amount of the policy) only if you die during the term of the policy.

Term life insurance may offer the option of renewing your coverage at the end of your policy term. Some term insurance policies can be converted to permanent or whole life insurance policies without requiring that you take a medical examination.

Level Term Insurance
Level term insurance provides you with a fixed premium for a specified period of years, usually 10, 20 or 30 years. The death benefit remains the same. The main advantage of this policy is that you "lock-in" a certain premium rate for the period of your policy. Compare and Save on Term Life Insurance. Get a Free Quote now.

Renewable Term Insurance
Renewable term insurance allows you to renew your policy at the end of your policy term without having to take a medical exam. Your insurance company has to renew your policy even if your health has deteriorated. But, the premium rate will be higher with each renewal year.

Convertible Term Insurance
Convertible term insurance allows you to convert your term insurance policy into a permanent life insurance policy without requiring that you take a medical examination. Convertible term insurance usually costs more than non-convertible term insurance policies.

Decreasing Term Insurance
Decreasing term insurance provides a death benefit that decreaes over the term of the policy. For example, you may start with $100,000 in coverage and the amount of coverage may decrease by $10,000 each year for 10 years. This policy allows you to pay the same amount of premium each year for less insurance over time, instead of having your premiums increase over time for the same amount of coverage. Compare and Save on Term Life Insurance. Get a Free Quote now.

Increasing Term Insurance
Increasing term insurance begins with one level of death benefit, but gradually increases over the life of the policy. For instance, you may start out with a $100,000 policy and increase the death benefit by $10,000 each year for 10 years. This type of policy may be useful for people who see their insurance needs growing in future years, because of buying a house or having more children.

Whole life insurance, also known as permanent life insurance, provides you with long-term protection. Your life insurance premium is based on your age, so the earlier you start your policy the better.

Whole life insurance premiums remain level, or the same, for the policy period. Because premiums remain level, the policy is usually much more expensive than term insurance.

Whole life insurance builds cash value within the policy. You can borrow against, or take out a loan on the cash value within your whole life insurance policy. The proceeds of some whole life insurance policies can be used to pay the financial burdens of terminal illness, serious illness, or long-term care. The accelerated benefits may be offered to you as part of the basic whole life insurance policy, or as a rider (additional coverage) added to an existing life insurance policy.

Two Types of Traditional Whole Life Insurance:

Universal Life Insurance
Universal life insurance allows you to change the death benefit and/or the amount of premium and premium payment frequency. Universal life usually pays a minimum guaranteed interest rate of 4% to 4.5% within your policy. If interest rates continue at low levels, you may need to pay additional premiums to avoid a lapse of insurance life insurance coverage in your policy.

Variable Life Insurance
Variable life insurance has death benefits and cash values that vary depending on the outcome and growth of your variable life insurance policy investment portfolio. Your death benefit and cash value are not guaranteed. They can go up or down over time. There may be a minimum guaranteed death benefit.