Life Insurance
Financial protection for your loved ones in the event of your passing.
Typical cost: $300 – $3,000+ per year
What Is Life Insurance?
Life insurance is a contract where, in exchange for premium payments, the insurer guarantees a lump-sum payment—the death benefit—to your beneficiaries upon your death. It replaces lost income, pays off debts, funds education, and ensures your family maintains their standard of living.
Term vs. Permanent Life Insurance
Term life provides coverage for a specific period (10, 20, or 30 years) and is straightforward and affordable. Permanent life insurance (whole life, universal life) covers you for your entire lifetime and includes a cash value component that grows over time at a higher premium.
How Much Do You Need?
A common guideline is 10-15 times your annual income. Your actual need depends on outstanding debts, number of dependents, desired income replacement years, future education costs, and your spouse's earning capacity. The best time to buy is when you're young and healthy—premiums increase significantly with age.
What's covered
Death Benefit
Tax-free lump-sum payment to your beneficiaries to replace lost income and cover expenses.
Term Coverage
Affordable coverage for a fixed period that pays out only if death occurs during the term.
Whole Life
Lifelong coverage with a guaranteed death benefit and cash value that grows at a fixed rate.
Universal Life
Flexible permanent coverage allowing you to adjust premiums and death benefits over time.
Cash Value
Permanent policies build tax-deferred cash value you can borrow against during your lifetime.
Accelerated Death Benefit
Early access to a portion of the death benefit if diagnosed with a terminal illness.
Waiver of Premium
Optional rider that waives premiums if you become totally disabled.
Specialized coverage
Explore specific life insurance options.
Term Life Insurance
Affordable coverage for a specific period of time.
Whole Life Insurance
Permanent coverage with a cash value component.
Universal Life Insurance
Flexible permanent coverage with adjustable premiums.
Variable Life Insurance
Permanent coverage with investment options.
Final Expense Insurance
Coverage for funeral costs and end-of-life expenses.
Survivorship Life Insurance
Joint policy covering two lives, paying out after the second death.
Pros and cons
Advantages
- Death benefit is income-tax-free for beneficiaries
- Term life is highly affordable for young, healthy individuals
- Replaces lost income to protect your family's financial future
- Permanent policies build tax-deferred cash value
- Convertible term policies offer flexibility as needs change
- Coverage amounts are customizable to your specific needs
Considerations
- Permanent life premiums are significantly higher than term
- Cash value growth is slow in early years
- Term life provides no benefit if you outlive the policy
- Medical underwriting can mean higher rates for health issues
- Surrendering a permanent policy early may result in losses
Frequently asked questions
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