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Basic Types of Life Insurance

Michael Wodchis leads as vice president of strategic alliances and business development at Windsor Insurance Associates in Woodland Hills, California. In this role, Michael Wodchis seeks out and acts on opportunities to grow life insurance revenue from various distribution sources.

The process of buying life insurance can be complicated. One basic type of life insurance is called term life. Term life insurance pays benefits at the policyholder's death. Consumers purchase term life insurance for a specified time, which typically ranges from 10 to 30 years.

Most term life insurance policies carry the same premium throughout the life of the policy, though the policyholder can sometimes renew at a higher premium if the policy expires. The death benefit remains flat unless the individual purchases an increasing or decreasing term life policy.

A permanent life insurance policy offers the benefit of not having an expiration date, no matter how long the policyholder lives. The basic form, whole life insurance coverage, also allows the premium to remain level throughout the life of the policy. Universal life is also a permanent policy but offers greater flexibility than whole life.

Permanent life insurance typically includes a cash value investment component that the policyholder can access at their discretion. A life insurance professional can more fully explain all of the available insurance options while providing guidance on choices based on need and risk tolerance.


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