Life Insurance 101.

Knowing the basics of life insurance

How it works. It’s a contract between you and a life insurance company. Regular payments, called premiums, ensure a payout goes to a beneficiary when the insured passes away.

Types of coverage. The two broad categories of coverage are term life insurance and permanent life insurance. Term gives you coverage for a certain period of time, while permanent gives you coverage for life. Whole life and universal life fall into the category of permanent life insurance. Whole life has guaranteed cash value growth and universal life allows a bit more flexibility in terms of how much you pay and when. If you end up deciding on a term policy, you may be able to convert it to a permanent policy in the future, without going through many additonal steps.

It’s more affordable than you think. The younger and healthier you are, the lower your premium is. Locking into insurability now means optimal rates for life.

The price depends on you. Policy premiums are determined by several variables, such as the age, health profile, gender, occupation, and lifestyle of the individual.

It matters who you buy from. You’re investing in your long-term future, so purchase from a provider that’s trusted, reliable, and financially stable.

Flexibility is everything. As your life changes over time, your needs change, too. A life insurance policy should be flexible and adapt to your life plan.

It may not be just term or permanent, it could be the best of both. The right solution fits your specific needs, and that could be a blend of both term and permanent insurance.


Terms to know