Types of Life Insurance Personal Finance

Term Life Insurance “Pure” insurance protection Insures you for a “term” – a period of time Inexpensive while young Prohibitively expensive when old Allows you to purchase maximum insurance for the least cost It will “run out” at some point The most typical type of term insurance has level premiums for 10 years

Whole Life Insurance Insurance with cash value buildup The cash buildup is always tax-deferred, and often tax-free Dividends may be paid, but are not guaranteed Level premiums for a lifetime – guaranteed Investment risk is with the insurance company Moderately expensive while young Comparatively inexpensive while old Assures that you will always have some life insurance if you continue to pay the premium

Universal Life Insurance Combination of Whole Life and Term Less expensive than Whole Life, but fewer guarantees More expensive than Term, but premiums will hopefully stay level Investment risk is mostly with the insured May allow for individual investment selection Variable Insurance – you can have the premiums invested in stock, bonds, real estate, etc.