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An explanation of Life Insurance Products

Life insurance comes in two basic flavors: Term Insurance and Permanent Insurance. There are several "hybrid" products that combine elements of both but the discussion of life insurance starts here.

Term insurance is temporary insurance. It is very similar to auto insurance in that, as long as you pay the premium(usually to a maximum age of 70) you have the coverage. The day you miss a premium, you no longer have your term insurance. It is cheaper than permanent insurance and does not contain any cash value. Premiums increase as you get older and normally are prohibitively expensive when you get into you 50's and 60's. An added benefit to term insurance can be the ability to "convert" to whole life insurance at a later date.

Permanent insurance is life insurance you have for your "whole life".Variations of permanent insurance include whole life, ordinary life, universal life, adjustable life, and variable life insurance. Premiums are generally fixed, although can rise if the insurance company does not meet their projected rates of return, have a cash value, and may "buy more insurance over time. The cash value and increasing death benefit can offer the ability to stop making payments on your policy after a period of time. You can withdraw money form a permanent life insurance policy in the form of a policy loan.

This is intended to be a brief description of the product. You should consult with a professional life insurance agent to review the products in greater detail. You will be doing yourself a favor if you educate yourself using as many resources as possible before buying a life insurance policy.

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