Written by Monica Sandler

Tuesday, 20 March 2007 17:58

Life Insurance pays a lump sum of money to your family, your loved ones, or any other beneficiaries in case of your death in exchange for a small premium contributed regularly. Life insurance allows you to essentially replace your income and provide for your family even after your death. The money paid can be used for many purposes, such as providing stable financial support to the survivors, paying off mortgage, sending your kids to college, and much more. Life insurance comes in two kinds: term and permanent.

Term Life Insurance covers you over a specified period of time. We generally recommend term insurance over permanent insurance as a means to buy time until you have accumulated enough wealth to protect your family and loved ones on your own. Our online Financial Analyzer will tell you how much life insurance coverage you need, and how much your premium is likely to be.

Permanent Life Insurance including whole life and universal life provides protection benefits over a longer term. There are many kinds of permanent life insurance, each of which has unique features that make it appropriate for certain situations.

The two main categories of permanent life insurance are fixed and variable. Fixed life insurance grows stably with a guaranteed minimum interest rate or guaranteed cash value. Variable universal life insurance provides flexibility in premium payments and accumulates value with a rate that fluctuates with market conditions.

Survivorship Life Insurance covers two individuals at the same time, and provides its benefits after the death of the last surviving insured. Survivorship policies can be whole life, universal life, or variable universal life insurance.