Browsing all the different types of life insurance can seem overwhelming. At Aflac, we want to help simplify your search and guide you in finding the life insurance policy that best fits your lifestyle.
Depending on your coverage goals, family size, income and financial aspirations, there may be one type of life insurance better suited to your specific needs than others. Let’s dive into how life insurance works, the types of policies available, and how you can choose the life insurance that’s best for you and your loved ones.
How does life insurance work?
While there are several life insurance options, these plans tend to work in a similar way. Whether you have life insurance that lasts your whole life or just 20 years, you must pay regular premiums to receive your benefits. Most life insurance plans have a benefit that is paid to the beneficiary when the policyholder dies.
Depending on the type of life insurance policy, other benefits may be available. Some life insurance plans offer benefits that can be used while the policyholder is still alive. these benefits may come in the form of a cash value component that can be used to help cover medical expenses or daily living costs.1
types of life insurance
Each life insurance plan is different, so understanding the different types of life insurance is crucial. Read on to find out which life insurance option may be best for you and your family.
whole life insurance
As its name suggests, whole life insurance is a type of permanent coverage that lasts a lifetime. the benefit will be paid to your beneficiary each time you die. this may be a more expensive option up front, but the benefits may be more secure in the long run.
Whole life insurance may be the best type of coverage if you’re looking for guaranteed support for your loved ones on any timeline. it can also be a wise move if you expect to consider long-term financial planning.
term life insurance
On the other hand, term life insurance provides coverage for a specific term or amount of time. At Aflac, we offer multiple terms in 10-, 20-, and 30-year increments. this plan may be a cheaper route. however, the policyholder must pass during the plan’s designated period for the beneficiary to receive benefits.
There are also additional considerations about term life insurance. In some cases, you may be able to extend the length of your term life insurance policy if you exceed the time period (subject to limitations and exclusions). this depends on your payment history and the guidelines set by the insurance company. many customers compare costs and values between term life and whole life insurance.
universal life insurance
Universal life insurance works a little differently than term life insurance and whole life insurance. It is a type of permanent policy that has an investment portion. This portion, also known as the cash value, can grow over the life of the policyholder. growth occurs in a tax-deferred account at a stable rate.
This type of life insurance plan also allows for more flexibility, as you may be able to adjust premium payments and benefit values over time.2
group life insurance
As a business owner, it’s important to make sure your employees feel safe and visible. Group life insurance is an excellent option if you are looking to provide benefits to your employees or members of an organization. Aflac gives you the opportunity to offer your workers group or term life insurance options.
Which life insurance plan is best for me?
How much you want to spend on premium payments, how much coverage you’d like to insure for your family, and access to cash benefits are important determinants to consider when deciding on the best life insurance policy for you.