Coverage Options
Different families need different kinds of protection.
There is no single best policy — only the one that fits the obligation in front of you. Here is a straightforward look at what each option is, who it may be appropriate for and what to weigh before deciding.
01 — Term Life
More protection during the years that matter most.
Term life insurance provides a death benefit for a defined period, commonly 10, 20 or 30 years. If the insured passes away during that term while the policy is in force, the carrier pays the death benefit to the beneficiaries. Because coverage is temporary, term is generally the lowest-cost way to secure a large death benefit.
Who it may be appropriate for
- Young families with children at home
- Homeowners carrying a mortgage
- Households relying on one or two incomes
- Business owners covering a loan or buy-sell obligation
Common reasons families consider it
- Replace income during working years
- Cover a mortgage or other large debt
- Fund a child's remaining years at home or education costs
- Secure a meaningful death benefit on a limited budget
Important considerations
- — Coverage ends when the term expires unless renewed or converted
- — Premiums at renewal are typically much higher
- — Many policies include a conversion option to permanent coverage — confirm the terms before you buy
- — Approval and pricing depend on carrier underwriting
02 — Whole Life
Protection built to last a lifetime.
Whole life insurance is permanent coverage intended to remain in force for the insured's lifetime as long as required premiums are paid. Premiums are generally level, and the policy may accumulate cash value over time that the owner can access through loans or withdrawals, subject to policy provisions.
Who it may be appropriate for
- Families who want coverage that does not expire
- People planning for legacy or final expenses
- Those who value predictable, level premiums
- Households already covered by term who want a permanent layer
Common reasons families consider it
- Lifelong protection regardless of future health changes
- Predictable premium that does not increase with age
- Potential cash value that may be accessed during life
- Leaving a defined legacy to family or a cause
Important considerations
- — Premiums are higher than term for the same death benefit
- — Cash value builds slowly in the early years
- — Loans and withdrawals reduce the death benefit and may have tax consequences
- — All values and provisions are governed by the policy contract and carrier
03 — Final Expense
Help your family prepare for life's final expenses.
Final expense insurance is a small permanent life policy, often issued with simplified underwriting and no medical exam. The death benefit is typically modest and is intended to help beneficiaries pay for a funeral, burial or cremation, outstanding medical bills and other immediate costs.
Who it may be appropriate for
- Older adults who no longer need large income replacement
- People who want to spare family the cost of a funeral
- Applicants with health histories that complicate traditional underwriting
- Anyone wanting a simple, fixed benefit in place
Common reasons families consider it
- Cover funeral, burial or cremation costs
- Settle small outstanding bills
- Avoid leaving a financial decision to grieving family members
- Qualify without a full medical exam in many cases
Important considerations
- — Cost per dollar of coverage is higher than larger policies
- — Some policies include a graded benefit period in the first years
- — Benefit amounts are limited compared with traditional life insurance
- — Availability and terms vary by state and carrier
04 — Indexed Universal Life
Flexible protection with long-term potential.
Indexed universal life (IUL) is permanent coverage with flexible premiums and an adjustable death benefit. Cash value crediting is based in part on the movement of a market index, subject to caps, participation rates, floors, policy charges and carrier provisions. The policy is not invested directly in the market, and index performance is only one factor in how a policy performs.
Who it may be appropriate for
- People who want permanent coverage with premium flexibility
- Households comfortable reviewing a policy regularly over time
- Those who have already funded other core protection needs
Common reasons families consider it
- Permanent death benefit with adjustable funding
- Potential cash value accumulation subject to policy terms
- Flexibility to change premium timing within contract limits
Important considerations
- — Crediting is limited by caps and participation rates; floors limit downside crediting but charges still apply
- — Policy charges and cost of insurance can increase over time
- — Underfunding a policy may cause it to lapse
- — Illustrations are projections, not promises — no investment return is guaranteed
05 — Annuities
Turn retirement savings into dependable income.
An annuity is a contract between an owner and an insurance carrier. Depending on the type selected, it may be used to accumulate value on a tax-deferred basis, to provide a stream of income for a set period or for life, or both. Terms, charges, surrender schedules and income options vary significantly between contracts.
Who it may be appropriate for
- People approaching or in retirement
- Savers looking to convert a lump sum into income
- Households wanting a portion of retirement assets in a contractual arrangement
Common reasons families consider it
- Create an income stream to complement Social Security or a pension
- Tax-deferred accumulation within the contract
- Structure a portion of savings with defined contractual terms
Important considerations
- — Surrender charges may apply to early withdrawals
- — Fees, riders and contract charges vary widely
- — Withdrawals may be taxable and may be subject to penalties before age 59½
- — Guarantees are backed by the claims-paying ability of the issuing carrier; no investment return is promised
Product descriptions on this page are general and educational. Features, costs, availability and guarantees are determined by the issuing carrier and the policy contract, and vary by state. No premium, approval or investment return is guaranteed.
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