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Many people do fully understand what life insurance is and how it works. This is partly because life insurance is somewhat complex, and partly because it is a very flexible type of insurance that offers many opportunities for creating security for you and for your family.
The two basic types of life insurance are:
Term life insurance: A term life policy is in force for a specific time and has a face value (coverage amount) that you specify when you buy the policy. In the event that you die within the specified term, the insurance company pays the face value of the policy as a death benefit to your beneficiaries.
Permanent life insurance: A permanent life insurance policy (which includes whole life, universal life and variable life insurance) is in force for your lifetime as long as you continue to make your premium payments. Like term life insurance, permanent life insurance pays a death benefit. But it also has an accumulating cash value.
To get a complete understanding of your options and evaluate quotes, contact a local independent agent in the Trusted Choice® network who specializes in life insurance. Trusted Choice member agents work for you, the customer, not for a life insurance company. Your agent will be able to provide options and quotes from multiple insurance companies and help you to make an informed decision about the right life insurance for you.
In its basic form, a life insurance policy provides death benefits and is designed to cover loss of income, end-of-life expenses, funeral costs and other financial needs that a family may have if you – the policyholder – should die unexpectedly.
While death benefits are often designated for funeral expenses and income replacement, life insurance is a very flexible type of coverage that can be used in numerous ways.