Understanding Life Insurance Products
Life insurance is a product which pays a death benefit to a designated beneficiary upon the death
of the person insured. There are two basics types of life insurance policies: term or permanent.
Term Life Insurance
Provides coverage for a specific length of time or “term”. The insured selects how long he/
she would like to be covered when purchasing term life policies. When you receive a term life
insurance quote from anyone, you should of course note how long the term is.
Return of Premium
Term life insurance for a specified period of time. The owner of the term life insurance policy
receives a guaranteed return of premium paid if the policy is kept for the term period. For
example, 20 year return of premium would guarantee a return of premium after you paid 20
years of premium.
Permanent Insurance
Refers to life insurance policies that cover the insured for the entire duration of his/her life.
There are multiple permanent life insurance products available and when you receive a free life
insurance quote, be sure you compare these terms:
Whole Life Insurance
Provides a guaranteed level death benefit until death or age 100 which ever comes first, and
builds a guaranteed cash value which will equal the face amount of the policy at age 100.
Universal Life Insurance
Provides permanent protection with flexible death benefit, premium amount, payment period,
cash value growth, and protection periods.
Variable Universal Life Insurance
Provides the opportunity for customers to have life insurance protection and participation in
debt and equity markets under one umbrella.
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Understanding Life Insurance Products, cont.
Survivorship Life Insurance
Provides coverage for two or more persons with death benefits paid upon the death of the
last insured.
Simplified Issue Life Insurance
Provides basic life insurance coverage that generally requires no blood or urine samples,
medical exams, or medical records in order to be insured.
There are three major terms to consider when reviewing life insurance policies and receiving a
free life insurance quote: options, provisions, and riders.
• Options refer to particular choices that the individual purchasing the life insurance policy
must decide including whether the policy is paid out monthly or in a lump sum.
• Provisions explain the different features of the life insurance policy that can be purchased
such as, benefits, conditions, and requirements of the contract.
• Riders are modifications to the original life insurance policy that can either add or subtract
benefits and are specific to each policy owner’s needs.
Especially when you receive an online life insurance quote, be sure you compare and understand
these terms.
Understanding Why To Buy Life Insurance
There are multiple reasons to purchase life insurance policies. The primary purpose for
purchasing life insurance is to provide financial stability to beneficiaries in the event of the
insured’s death. Beneficiaries are faced with a myriad of financial responsibilities after the death
of the insured.
Not only is the loss of an income devastating to a family, but any previous debts of the deceased
such as credit cards, automobiles, even mortgages have to be paid in addition to funeral
costs. Life insurance can help to balance the financial burden of the beneficiary by providing a
consistent income or a lump sum of money.
Life insurance can also be purchased as a savings tool. Certain life insurance premiums actually
include cash savings. More simply, if a “permanent” life insurance policy was purchased for a
premium of $1,000 per year, a portion of that money would pay for the life insurance while the
other portion would be invested. The invested portion (cash value) is tax-deferred enabling
larger financial growth for the individual. These types of life insurance policies can be used as
collateral when taking out a loan or even advanced savings for a child’s education. When you
receive free insurance quotes, be sure you understand the benefits of the policy and verify that it
meets your needs and wants.
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Understanding Life Insurance Products, cont.
Understanding Life Insurance Policy Beneficiaries
A beneficiary is defined as the person whom receives the pay out of a life insurance policy in
the event of the insured’s death and are often times referred to as revocable or irrevocable.
Revocable beneficiaries of life insurance policies can be terminated from the policy at any time
while irrevocable beneficiaries must give their authorization to be removed from the policy.
There are three different types of beneficiaries that need to be named on each life policy:
primary, secondary, and final. Primary life insurance policy beneficiaries are the first person to
receive the benefits in the event of the insured’s death, while the secondary beneficiary would
receive the death benefits in the event of both the insured and primary beneficiary’s death. The
final beneficiary refers to the person, group, or charity, which would receive the death benefit
from the life insurance policy if the insured, primary, and secondary beneficiaries had died. Most
financial analysts suggest consulting a tax professional when choosing beneficiaries.
Understanding How To Select Life Insurance
Numerous life insurance policies and products are readily available and we can provide free
insurance quotes for all our policies. Many people express the same questions. Review the FAQ’s
about life insurance to help in selecting a life insurance policy that best suits your needs.
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