When you're looking for life insurance, you want coverage that will bring peace and security to you and your loved ones. You want something that can accommodate your monthly expenses and big life goals like college or a wedding. Pay off your mortgage. These are important things that family members often worry about, if not more so, after the death of a loved one, especially if they are responsible for all of the family's income and cash flow.

Life insurance policies need to be chosen carefully as they are only suitable for such important things. Therefore, they must be of high quality and provide you with completely clear information. Let’s discuss which life insurance is best for you and your family.  

1. Term life insurance

This is a typical life insurance policy and involves a contract between your insurance company and you. It provides that upon your death, anyone you name as a beneficiary in your will or contract will receive the death benefit. This is often the simplest and easiest way to obtain life insurance, but it also doesn't offer many of the benefits of other methods like long-term life insurance or cash value insurance. It also has a specific length beyond which it kicks in and you can only benefit from it once it's over.

2. Permanent life insurance

The advantage of this type of life insurance is the accumulation of cash value. This basically means it's tax deferred, and the basic concept is that it accumulates money and earns interest over time. If you paid your premiums, your designated beneficiaries will continue to receive the death benefit after your death. Each time you pay a premium, it goes into the policy's cash value, then into the company's income, and finally into the insurance company's cost of providing the death benefit. A small percentage of what you pay translates into your cash value, but it grows over time. It accelerates faster when you are younger and more slowly when you are older because the insurance risk is greater.

3. Joint life insurance

What makes this life insurance different is that it covers two people. However, you will only receive the death benefit. This is definitely a more economical option. The first type of death insurance works like this: if one of the two people dies, the other will receive the death benefit and the insurance ends. For secondary death coverage, the beneficiary will receive benefits at the same time. This option is often chosen by older couples who want to provide financial security for their children.

4. AD&D Insurance

Accidental death and dismemberment insurance provides coverage if you die or lose a limb or vital function in an accident. If you die, your designated beneficiary will receive a settlement, and if you survive, your designated beneficiary will receive inter vivos benefits, depending on the nature of your injuries. Insurance may pay you in full if you lose one or more limbs, but may pay half if you suffer serious injuries.

5. Group life insurance

This insurance covers an entire group and is usually offered to people who work for the same company. The policy belongs to you as the owner, and if you pass while covered, your designated beneficiary will receive the payout. Payments can be tied to your annual salary and be doubled, depending on a range or an average fixed amount paid to each person.  

6. Direct Life Insurance

This type of life insurance policy is almost identical to permanent life insurance, except it pays you a fixed cash value rather than a value that grows over time based on your premiums. There is a fixed rate of increase, and there is a death benefit that benefits your beneficiaries. Because this is a more reliable form of whole-life insurance, it's also more expensive. The premiums you pay with this policy are also fixed. Once your savings reach a certain level, you can start withdrawing funds or opting for a loan.

7. Split life insurance

This is permanent life insurance shared by two people. Everything is split in half, and there is usually a contract between two or more parties on how the insurance will be split. Often it is used as part of an employee's compensation package. \ You can own it yourself or make your employer the owner. If you are an owner, your employer provides you with a bonus, and a portion of the death benefit goes to the employer and your beneficiaries. Vice versa if they have it.

8. Variable universal life insurance

Again, this is the same as permanent life insurance, but with two changes: You can adjust the death benefit based on your current coverage needs, and you can choose to invest the cash value in subaccounts. This gives you more freedom when investing. Each sub-account can be dedicated to different content and you can set it up the way you want.

9. Universal life insurance

The only difference with permanent life insurance is that you control the premium and death benefit amount. It's less expensive than regular life insurance and gives you the same options as permanent life insurance. The difference with VUL insurance is that you don't have any sub-accounts.

10. Index Universal Life Insurance

This works a bit similarly, but a bit differently. Part of the premium you pay goes towards your death benefit. Some cover the costs of administering the policy and providing the coverage. What's left is the cash value. Your beneficiaries receive this payment tax-free. The accumulation of cash value is tied to indices such as the S&P 500. The company uses the returns on that specific index to determine the amount owed on the account. You can choose between multiple indexes.

Conclusion

There are many different options for those who want to leave a more stable future for their families, and we hope this gives you a clearer idea of ​​what options are available to you. It's not just simple life insurance that provides a death benefit. So talk to your advisor about what's best for you.