Life Insurance and Annuities

Frequently Asked Questions

• How does life insurance work?

  Life insurance is a contract between you and an insurance company. The general agreement is that in exchange for sufficient premiums, the insurer will pay your beneficiaries a lump sum, called the death benefit, if you die during the policy’s term. How much you’ll pay and whether you’re approved for a policy is often based on your health, age, gender, lifestyle, occupation, and credit history. 

  Learn More: How Does Life Insurance Work?
• What is term life insurance?

  Term life insurance is a type of coverage that lasts for a set number of years. In other words, once the term expires, the policy (and your coverage) ends. Terms available typically range from five to 40 years. Term insurance is cheaper than permanent insurance because it isn’t designed to cover your entire life and there’s no cash value component.

  Learn More: What Is Term Life Insurance?
• What is whole life insurance?

  Whole life is a type of permanent life insurance coverage in which premium payments and the death benefit are fixed. They’re more expensive than term policies because they’re designed to last a lifetime, and less flexible than universal life policies. They offer guaranteed cash values, payments are guaranteed not to increase, and some policies pay dividends.

  Learn More: What Is Whole Life Insurance?
• What is universal life insurance?

  Universal life insurance, also known as adjustable life, is a flexible premium life insurance policy. Like whole life, it’s a permanent policy designed to last until your death, whenever that is, and is more expensive than term coverage. However, you can adjust your premium payments up or down, or pause making them, and may be able to change the death benefit. 

  Learn More: What Is Universal Life Insurance?
• What is supplemental life insurance?

  Supplemental life insurance, also known as voluntary life, is an optional life insurance benefit usually offered through work and designed to supplement your basic life insurance coverage. It can be more affordable than a policy purchased outside of work and usually won’t require a medical exam or underwriting—making it a good option for people who wouldn’t otherwise qualify for coverage. 

  Learn More: What Is Voluntary Life Insurance?
• How do you get life insurance?

  Life insurance may be available through your work, through membership organizations, and through life insurance agents and brokers both off- and online. Before you start searching for quotes, figure out how much and what type of coverage you want and how much you can afford. Once you have these answers, you can better shop quotes and compare policies and insurance companies.

  Learn More: How to Shop Around for the Best Life Insurance Quotes
• What is cash value life insurance

  Cash value life insurance is another term for permanent life insurance and refers to policies with a cash value that builds over time to offset the increasing cost of insurance as you age. Universal and whole life insurance are types of cash value life insurance. The cash value makes these policies an asset that can be used for collateral or from which funds can be withdrawn or borrowed.
  

  Learn More: What Is the Cash Value of a Life Insurance Policy?