Life Insurance
What is Life Insurance?
Life insurance represents an agreement or arrangement entered into with a life insurance company, which can remain in effect either throughout your lifetime or for a designated duration. This arrangement assures that your chosen recipients will receive a tax-exempt monetary payout, referred to as the death benefit, upon your passing. The precise sum they receive hinges on the extent of insurance coverage you acquire and the specific policy you opt for. It's crucial to understand that the assurance of the death benefit is contingent upon your consistent payment of the necessary premiums and compliance with all policy stipulations.
Types of Life Insurance
Term Life Insurance
It’s temporary coverage that can last 10, 15, 20 or more years. It’s initially a cheaper option. But your premiums typically rise if you decide to renew your policy at the end of your term.
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Some term plans let you convert to permanent life insurance. Permanent insurance is more expensive than term, but most plans offer premiums that remain the same for the rest of your life.
Permanent Life Insurance
It’s insurance coverage that lasts forever and never expires. There are three types of permanent life insurance: whole life, participating, and universal life.
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Some plans may also offer tax-preferred growth in your cash value and ways to increase the death benefit.