Types of Life Insurance

If the unexpected happens, would your family be able to pay the bills to maintain their present lifestyle? Does your spouse have the financial capacity to take care of the family needs like food, rent or clothing while you are gone?

If your answer is NO, you should consider investing in life insurance as an income replacement for your family. There are two options to opt for — term or whole life insurance.

Term life insurance is a type of life insurance policy that provides coverage for a specific number of years, ranging from 5 to 30 years. It guarantees payment to your spouse or heirs if you die during this period. 

Whole life insurance provides coverage for your entire life. For as long as you are paying your premiums, your beneficiaries will receive a death benefit irrespective of when you die. It generally costs more than term insurance but also comes with more living benefits like cash value that you can access ANYTIME during your life.

Final expense insurance is a type of whole life insurance policy with limited underwriting and small death benefits. Also called burial insurance, it is designed for seniors who want to make sure their loved ones are not left with the financial burden of their funeral and medical costs when they die. 

It is easier to secure as it requires no physical health exam. You can get it even if you have an underlying medical condition. The death benefit of final expense insurance is generally below $50,000, and the beneficiary can do whatever they like with the payout.