Life insurance provides a tax-free lump sum of money to replace lost income after your death, offering affordable financial protection — and invaluable peace of mind — to people whose friends or family rely on them.
The money from a life insurance policy can be used to pay expenses like a mortgage, utility and grocery bills, children's college costs, final funeral arrangements, and more.
While term life insurance is the most basic, straightforward type of life insurance, there are still variations on it so you can get the insurance policy that fits your needs. These include:
The premiums remain the same for the life of the policy. Learn more about level term life insurance.
Renews on a year-by-year basis; premiums usually start lower than a standard term life policy and increase each year. Learn more about annual renewable life insurance.
Premiums remain the same, but benefit amount decreases each year. Learn more about decreasing life insurance.
Allows you to get your money back at the end of the term. Learn more about return of premium life insurance.
Allows you to skip the medical exam and still receive coverage. Learn more about no-medical-exam life insurance.
Offered through the workplace, but not portable from employer to employer. Learn more about group life insurance.
A type of decreasing term insurance where the beneficiary is your mortgage provider and the term is pegged to your mortgage length. Learn more about mortgage protection life insurance.
Unlike whole life insurance and other forms of permanent life insurance, term policies don’t come with a tax-deferred savings component called the cash value. The cash value of a permanent life insurance policy accrues interest and can be used by the policyholder while they are still alive, while also usually making the life insurance policy costlier.
Due to its simplicity and affordability, purchasing term life insurance is one of the most popular ways to create a financial safety net. However, other types of life insurance can be a better fit for individuals with specific circumstances, such as lifelong dependents or a high net worth. Speaking to a life insurance adviser is the best way to determine what type of policy is the best fit for you.