When it comes to life insurance, it’s important to know the proper coverage amount that is required to take care of your family. Ideally, you want an amount that would take care of your kids until they become adults. Most people are confused when it comes to the different types of life insurance. Let me explain below.

Term Life Insurance

Term life insurance is the simplest form of life insurance. Basically, you pay a fixed payment for a certain period of time (the term). If the insured individual dies during the term, the death benefit is paid. Term life insurance is also the least expensive and most common form of life insurance.

Whole Life Insurance

This type of life insurance covers an individual for the rest of their life. However, premiums must be paid every year for the policy to stay in effect. This type of policy is often sold as an investment. The insurance company shares excess profits with the insured. This is often a type of life insurance that sales agents push onto unsuspecting clients who are not educated in the different types of life insurance.

Universal Life

Universal life insurance is a type of permanent (whole) life insurance. It is similar to whole life insurance in that the excess premium payments over the cost of insurance is credited as cash value to the policy. Watch out, as this type of policy is often sold to unknowing customers as a type of investment.

If you are looking to get basic coverage to protect your family, you need term life insurance. There are many ways to get term life coverage. There is even a form called simplified issue life insurance that allows you to purchase a policy without having to take the medical exam. This type is often referred to as no exam life insurance.