Term and permanent policies offer different approaches to duration, cost and cash value. Use these descriptions as a starting point, then ask us about product availability, eligibility and the features that fit your needs.
Protection for a defined period
Term life insurance
Term life covers a set period, such as 10, 20 or 30 years, and pays a death benefit if the insured dies while coverage is in force. It generally does not build cash value. It can be a practical starting point when your main concern is replacing income during working years, paying off a mortgage or supporting children until they become independent.
Worth discussing: Ask about the length of the level-premium period, renewal costs and whether the policy includes an option to convert to permanent coverage.
Long-term coverage with cash value
Whole life insurance
Whole life is permanent insurance designed to last for life when required premiums are paid. Traditional policies generally offer level premiums, a guaranteed death benefit and guaranteed cash value growth under the contract. Some participating policies may pay dividends, but dividends are not guaranteed.
Worth discussing: Review the premium commitment, guaranteed values and how any policy loans would affect the death benefit and available cash value.
Permanent protection with flexibility
Universal life insurance
Universal life combines a death benefit with a cash value account and may offer flexibility in premium payments and death benefits within policy limits. That flexibility requires attention: charges continue, and insufficient funding can cause coverage to lapse. Guaranteed and illustrated values should be reviewed separately.
Worth discussing: Ask what funding is needed to keep the policy in force and how changes in interest rates, costs or payments could affect its duration.
Cash value linked to an index formula
Indexed universal life insurance
Indexed universal life is a form of universal life in which interest credits depend partly on an external index and the policy's crediting rules. The cash value is not directly invested in that index. Caps, participation rates, charges and other contract provisions affect results, and a crediting floor does not eliminate policy costs.
Worth discussing: Understand both the guaranteed terms and the assumptions in an illustration before comparing it with another policy.
Permanent coverage with investment risk
Variable life & variable universal life
These policies offer investment options for cash value, with values affected by market performance. Variable universal life also provides premium flexibility within policy rules. Investment losses and policy charges can reduce value and may require additional premiums to sustain coverage.
Worth discussing: These are securities products. They require appropriate licensing and a review of the prospectus, fees and investment risks. Ask us which options and licensed resources are available for your situation.
A smaller benefit for end-of-life costs
Final expense life insurance
Final expense coverage is commonly a smaller permanent life policy intended to help beneficiaries with funeral costs and other bills. Simplified-issue and guaranteed-issue versions may have different health questions, premiums and benefit restrictions. Some policies limit benefits for certain deaths during an initial period.
Worth discussing: Compare the benefit, total premium commitment and any waiting or graded-benefit period rather than choosing solely on an easy application.
