Life insurance gives your beneficiaries financial security after your passing, and depending on the type of policy you choose, the death benefit paid out to your beneficiaries could be a significant amount. This is why it’s important to go over the life insurance options available to you to determine which policy would meet your needs, as well as your loved ones.

Let’s take a look at the different types of life insurance policies below so you can make an informed decision!

Term Life

Term life insurance is designed to be active for a set number of years. The most common lengths of a term policy are generally 10, 20, or 30 years. If you happen to pass away while your policy is active, the death benefit will be paid out to your beneficiaries. However, if you do not pass within the given term of the policy and the policy comes to an end, you can let the policy expire, renew it for another term, or convert it to a permanent policy. Permanent policies include whole life, universal life, and final expense.

Whole Life

Term life insurance is designed to be active for a set number of years. The most common lengths of a term policy are generally 10, 20, or 30 years. If you happen to pass away while your policy is active, the death benefit will be paid out to your beneficiaries. However, if you do not pass within the given term of the policy and the policy comes to an end, you can let the policy expire, renew it for another term, or convert it to a permanent policy. Permanent policies include whole life, universal life, and final expense.

Universal Life

Universal life insurance covers you for your lifetime as long as you continue to pay your premiums. These policies will not only provide a death benefit for your beneficiaries, but they will also provide a cash value benefit for you specifically. The premiums you pay beyond the cost of insurance will feed into the cash value component, which accumulates interest. Policyholders use this cash value to pay for the cost of their premiums.

Final Expense

If you do not qualify for life insurance due to your age or health reasons, final expense insurance is a good alternative to look into. The death benefits for these policies will be much smaller than other life insurance policies, usually ranging between $2,000 to $50,000, but they are very easy to qualify for. They do not require a medical exam and the most you may have to do is answer a simple medical questionnaire.

This is a permanent policy, so as long as you keep up with your policy premiums, your policy will stay active and your beneficiaries will receive the death benefit once you have passed.