Life insurance provides a cash payout after death to designated beneficiaries. Beneficiaries can be spouse, children, trust, estate, charity or key person of a business. There are several life insurance options available
- Term Life Insurance
Coverage for a specified term that pays a cash benefit at the time of death. Premiums are at a fixed rate for the term. Terms are typically 1, 5, 10, 20 or 30 years. - Whole Life Insurance
Coverage for life that pays a cash benefit at time of death as long as premiums are paid. Whole life is permanent life insurance and has a fixed premium and accumulates a cash value. - Universal Life Insurance
Coverage for life that pays a cash benefit at time of death. UL is permanent life insurance but is different than whole life. A UL policy can be backed by a whole life policy or a term life policy. Premiums are fixed for the duration of the policy. Any payments in excess of the cost of insurance is credited as cash value. - Variable Universal Life Insurance
Coverage for life that pays a cash benefit at time of death. VUL like UL is permanent life insurance. The cash value in a VUL can be invested in several accounts similar to a mutual fund. VUL premiums can vary due to the variations of the investment accounts.