Updated January 16th, 2025

No one likes thinking about life insurance, but purchasing a policy means your loved ones will not find themselves in a difficult financial situation if you were to die unexpectedly.

A life insurance policy will provide you with peace of mind in case you’re diagnosed with a terminal or debilitating illness. With some types of life insurance, you also have the option to cash out your policy in case of an emergency.

Types of Life Insurance

These are the most common options:

1. Whole Life. Whole life insurance is a lifelong policy, guaranteed to pay out after your death, as long as premiums are maintained. The key advantages includes:

• Guaranteed Pay-Out: Your beneficiaries will receive a set amount upon your passing, ensuring financial security.
• Stable Premiums: Once set, your premiums will not increase over time.
• Cash Value Accumulation: A portion of your premiums contributes to a cash value that grows at a predetermined rate, which you can borrow against as needed.

2. Universal Life. Similar to whole life insurance, universal life policies enable cash value accumulation but with added flexibility. Key features include:

• Interest Earnings: Your cash value earns interest, often with a minimum guaranteed rate.
• Investment Options: Some policies allow you to select investments that can influence potential returns, though these come without guaranteed interest rates.

3. Term Life. Term life insurance is the most affordable option, making it a popular choice for many individuals. Main characteristics include:

• Coverage Duration: Typically purchased for a specific term, commonly 20 years, focusing primarily on providing a death benefit.
• Renewal Options: Most providers allow you to renew the policy at the end of the term, but premiums will be reassessed based on current risk factors.

For those on a limited budget seeking to secure a death benefit, a term life insurance policy is a suitable choice.

However, a whole life insurance policy is a better investment in the long-term since your premiums never go up and you’ll always have the option to borrow against a portion of the cash value of your policy.

Cost Factors

It’s important to understand the factors that affect the cost of life insurance before you buy a policy. The type of coverage you buy influences the cost of your premiums, but insurance providers also look at different factors to assess how much of a risk you represent for them.

These factors influence how your premiums are calculated:

1. Your medical history, existing health conditions, and weight

2. Your occupation and any risks associated with your profession

3. Any risks associated with your hobbies. Dangerous hobbies include sky diving and more.

4. Whether or not you smoke or drink

5. Personal information such as your age, gender, and your family history

A no-exam policy is your best option if you are not looking to deal with a physical examination such as getting your blood drawn, urinalysis, or mouth swabbing. Typically, a no-exam policy costs slightly more than other life insurance products, but it might be your best option.

If you cannot find an affordable policy, look into making a few changes to your lifestyle so that insurance providers will see you as less of a risk. You could, for instance, lose a few pounds, quit smoking, or take steps towards managing an existing health condition.

Also, it’s smart to take the time to compare rates and policy benefits from several companies. Here at Family For Life Insurance , we represent 20+ A rated insurance carriers and we are able to shop around for the best insurance coverage on your behalf so as to save you time and money.

Selecting a Life Insurance Provider

Besides choosing a policy that meets your needs, it’s also important to select a reputable life insurance provider.

It’s best to buy a policy from a renowned insurance company that will still be around decades from now. Your insurance provider should offer good customer service and take the time to answer all your questions about their products. Checking reviews and reports published by consumers’ associations will also help you choose a provider.

Comparing life insurance products, learning more about insurance providers, and requesting quotes will save you money and help you find a policy that’s right for you. This process takes time, but you’ll enjoy greater peace of mind once you’ve made your purchase.

Click HERE to book your free consultation to help you determine which type of life insurance is right for you.