Life Insurance

Individual life insurance protects against the premature death of a person who makes essential economic contributions to a family or a business.

Term Life Insurance

One form of life insurance is low cost term insurance, that provides protection for a set period of time; usually 5 to 30 years. Term life policies can also be annual renewable, where the period of coverage is one year and the premium increases each year that the policy is renewed. Level term policies are for a set period of time and the premium does not change during that period.

Term life policies fit the needs of young families, who have a limited amount of money for life insurance but the need for a large death benefit when either spouse dies prematurely. These polices also apply in various business situations, where the premature death of an owner could disrupt the continuation of the business.

Permanent Life Insurance

Permanent life insurance is the other form of individual life. Premiums are higher than term life, as this insurance runs for the life of the person insured. Permanent policies fit the same needs as term life, plus they build cash value and can be surrendered at any time for a cash return. They are the best option for paying estate taxes in large inherited estates. Permanent policies are most cost effective in the long run, since they accrue a cash value that can be borrowed against. Term policies can be quite expensive at an older age, especially after age 75. Most companies will not issue a term policy at this age. Thus, when there is a long term need for life insurance, permanent policies are the best option.

Group Life Insurance

Group life insurance is term insurance that can be guaranteed with no medical underwriting, depending on the size of the group. Death benefits start at $10,000 and usually do not run past the age of 65.