How does life insurance work?
In its most basic form, when you purchase a life insurance policy, you are entering into an agreement to pay premiums in exchange for coverage in the form of a death benefit to your designated beneficiaries. You can customize your policy through policy features and additional benefits based on your financial needs and goals.
Do I need life insurance?
If there is anyone who depends on you financially or would take on a cost if you were to die, then you need life insurance. Many of us think of spouses or children when it comes to beneficiaries, but even single people with no children have final expenses that would need to be addressed.
Term life or whole life insurance?
Which is right for you? The right solution is one that provides a balance between premium costs and plan benefits while meeting your coverage needs, and it very well may be a combination of both types of life insurance products.
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Why consider term life?
- Provides coverage for a particular length of time and pays a benefit if you die during the term period
- Less costly in the short term, but there is no cash buildup
- The lowest initial premium to obtain the highest death benefit
- Ideal for those who need coverage for a specific period of time
- Option to convert to whole life insurance later without evidence of insurability
- Income tax-free death benefit1
Why consider whole life?
- Provides lifetime2 coverage as long as premiums are paid
- Tax-deferred growth of policy cash values
- Liquidity through policy loans, which can help supplement retirement income, college costs and more3
- A stable financial asset on your balance sheet that will never lose value year to year
- Income tax-free death benefit1