The two main types of life insurance Term Life Insurance and Permanent Life Insurance Term Life coverage is generally used to provide one with a fixed period of protection that typically ranges from a 5 to 30 year time period. Term life insurance costs are based on age, policy length, and health, and these policies are typically less expensive than permanent life insurance policies. One benefit of many term life policies is that they may be able to be converted into a permanent life insurance policy at different times during the policy period.

Permanent life insurance offers lifetime coverage as long as the premiums are paid. Permanent life insurance products contain a cash value component that is accessible to the policyholder. Permanent life insurance is typically more expensive than term insurance but does become more cost-effective with age. The most common types of permanent life insurance products (including their main characteristics) are:

Whole Life

• Safer purchase and low risk tolerance.
• A guaranteed death benefit and cash value accumulation.
• Maximum guaranteed and predictable premium payments.

Universal Life

• For those with lower to medium risk tolerance.
• Lower cost potential with flexible and adjustable premium payments.
• Cash value returns are linked to issuing company’s current interest rates.

Indexed Universal Life

• Medium risk tolerance.
• Equal desire for protection and cash value accumulation.
• Growth of cash value that is linked to a specific market index with strong downside protection.