Life Insurance
Life insurance is a contract between a policyholder and an insurer. The policyholder pays regular premiums and in return the insurance company promises to pay a sum of money, or death benefit, to one or more named beneficiaries if you pass away while the policy is in force.
Term Insurance
(Temporary)
Term life insurance provides coverage for a specified "term" (commonly 10, 20 or 30 years). If the insured person passes away during that term while the policy is in force, a death benefit is paid out to their beneficiaries. Because it doesn't accumulate cash value and its premiums are typically lower than permanent policies, term life is often chosen to protect against financial risks tied to a specific time frame, such as covering a mortgage, replacing income during working years, or ensuring children’s education is secured if something happens.
Permanent Insurance
Permanent life insurance provides a lifetime of coverage—so long as premiums are paid, the death benefit will be paid out no matter when the insured passes away. Because of this, it’s often chosen by individuals who want long-term protection, plan to leave a legacy, secure coverage well into retirement, or ensure that final expenses or estate obligations are handled. Common types are Whole Life, Variable Life, Universal Life, and Indexed Universal Life.
Indexed Life
(Permanent)
Indexed life insurance combines lifetime protection with a cash-value component whose growth is tied to the performance of a market index (such as the S&P 500), though the money is never directly invested in the market. The policy features a “floor” (often 0%) so that in years when the index loses value, the cash value doesn’t drop, and a “cap” or participation rate that limits how much of the index gain is credited to the cash value. Because of this structure, it appeals to individuals looking for permanent life coverage with the potential for upside growth and downside protection, such as those planning for leaving a legacy, estate issues, or tax-efficient accumulation while still having the permanent death benefit safeguard.
Riders
Life insurance riders are like optional “add-on" features you can add to a standard policy, and they help your coverage reflect your unique needs. For instance, you might choose a waiver of premium rider that stops your premiums if you become disabled and unable to work, or a guaranteed insurability rider that lets you increase your death benefit later (for example after marriage or having a child) without a new medical exam. Another popular example is a long-term care rider, which allows you to tap part of the benefit while you’re alive if you need extended care like assisted-living or in-home help.
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These riders often have a fee, but they're typically modest, especially compared to buying an entirely separate policy. The key is to think of the cost as a small premium for extra flexibility and peace of mind: you’re not buying something you might not use, you’re giving yourself options for when life changes.