Life Insurance

Life insurance has changed a lot over the years, and honestly, most policies have very good benefits now. While having each type of life insurance at all times would be ideal, our budget does not always allow for this. Below, you will find an explanation of the three different types, along with the traditional route people take when buying life insurance. 

There are two main types of life insurance: temporary and permanent. Temporary, or term insurance has a much lower cost compared to permanent insurance. This is because there is a chance you will not pass away during the time window that your policy covers you for. Permanent insurance, also called whole life, is more costly because it is guaranteed to pay out a death benefit at some point. Whole life insurance policies are often referred to as “final expense” or “burial” policies since most people purchase a smaller benefit amount.  

There are also policies called universal life insurance that are a mixture of the two main types of insurance. Universal life insurance is usually the type of insurance people are “using as an investment,” because these policies have the most versatility. For example, you can buy a policy and maximize the cash value growth instead of the death benefit to turn it into an income stream later on in life, or borrow against it if you ever need a loan. 

Typically, people have term insurance to cover mortgages, debts, and children’s tuition if they pass away unexpectedly or become seriously ill at an earlier age. When you start expanding your investment portfolio and thinking more about retirement planning, you might get a universal life insurance policy. Then, as people get closer to retirement and their term insurance expires, they purchase permanent whole life insurance to make sure their final expenses and funeral are covered. 

In today’s world, where long-term-care coverage is becoming more unaffordable, many are turning to life insurance to cover these costs. This can be done by purchasing a life insurance policy that offers living benefits to cover the costs of being cared for. These living benefits can pay out upon a number of different “events,” including just being diagnosed with specific diseases, such as Alzheimer’s. Many term life and universal life insurance policies have these benefits built right into the policy now. 

The table below shows a comparison between the different types of life insurance. 

For a free, no-obligation life insurance quote, call us at 402.830.5904 or fill out our quote form online by going here.