Term and Universal Life Insurance
Term life insurance
Term life policies take their name because coverage only lasts for a specific period of time such as one, five, 10, 15, 20, or 30 years; or until the insured reaches a certain age. The cost of term life generally increases as you get older. For people under age 40, term life generally provides the largest death benefit per premium dollar of any type of life insurance.
Term life can be a good choice for young families with children. You may only need coverage until the children are old enough and financially able to provide for themselves.
Universal Life Insurance
Flexible premium universal life insurance. The key feature to this type of policy is flexibility. Within certain limits, a flexible premium universal policy will allow you to choose the amount of coverage, the premium you pay, and the cash value you build. As long as the premiums continue to be paid, the policy will remain in force until the maturity date, at which point coverage ends and the cash value is paid to the policyholder.
A flexible premium policy will allow you to adjust the amount you pay in premium, the death benefit, or the cash value at any time. Any adjustment you make, however, will impact one or both of the other areas: Increasing your premium will build either your cash value, death benefit, or both. Likewise, lowering either your cash value or death benefit will decrease your premium.
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