Life Insurance

Types of Life Insurance

What is Life Insurance? At its most basic level, is a contract between you and a company to pay a sum of money to your beneficiaries in the event of your death, to cover expenses and make up for the lack of your income. Premiums are based on the type of insurance you buy, the benefit amount, and your chances of dying based on your overall health and lifestyle during the period when the policy is in effect.

There are basically two types. You may have heard of them – Term Life Insurance and Permanent Life Insurance. In this discussion we will review in broad terms the difference between the two. You can find more details any time by accessing these links.

  • Term Life Insurance - As the name implies, Term Life is a product that you purchase for a specific length of time, usually 5, 10 or 20 years. At the end of the term you are given the option of renewing the policy. Term life is strictly that, only insurance that pays a death benefit, as opposed to Permanent policies that accrue cash value. Term Life pays a lump sum single benefit at the time of death. Your family can use that money to cover funeral expenses, immediate bills, and invest in annuities to make up for the loss of salary to pay on-going monthly expenses. Term is the easiest and most affordable life insurance to obtain. A Term policy is great for young families just starting out.
  • Permanent Life Insurance - Unlike Term Life, there is no fixed time limit to Permanent Life, as long as you keep making your monthly premium payments the contract between you and the insurance company remains in effect. The other key difference between permanent and term life insurance is that a Permanent policy gains "cash value." Part of your monthly premium goes into a tax-deferred investment account that you do have access to while you are alive. There are various types of Permanent Life such as Whole Life, Universal Life and Variable-Universal Life

At TWFG Insurance Services we have access to many of the top rated Life Insurance Comanies.  If you are interested in purchasing life insurance the first step is to call us at 918 609 5000.