Life Insurance Products: Do you know the basic types?


The amount of choices within the available product make it even more confusing.  There are more than 1,500 life insurance companies currently active.  All of these companies typically offer a handful of different kinds of life insurance policies.

Let’s be honest.  Life insurance products can be pretty overwhelming.

It seems like there are a limitless amount of policy combination with all of these companies and all of these policies available.

Here’s the bad news.  There isn’t a website, book, or adviser that can cover every available feature and type of life insurance policy.  Did I just type that?  It’s true.

Companies are constantly modifying and  bringing in new life insurance products.  It’s not possible to cover every single available product.

Life Insurance Products

Take a deep breath.

There is a silver lining with all of these overwhelming combinations. Similarities.

Life insurance products have many similar parts when comparing types of products.  An example of this is with term life insurance.  A term life policy from Company ABC will be comparable to the term life policy from Company XYZ.

This is due to state insurance regulations.

Your life insurance policy (like all policies) will pay a predefined amount of money when the insured (you) should pass away while the life insurance policy is in force.

So all life insurance policies are the same? 

No.   All life insurance policies aren’t. As stated earlier, there are so many plans available to you.  Here are the two general plans that are available to you.

The Top Two

Some life insurance policies will provide you with “permanent coverage” and some will give you with “temporary coverage.”

What’s the difference?

Permanent Life Insurance

With permanent coverage, your policy will build cash value while other policies will not. Temporary coverage does exactly what is says.  It will provide you coverage for a temporary amount of time.  In other words you are paying for a set “term”.

Term Life Insurance

Hey, does that sound like Term Life Insurance?  It does.  Term life insurance is temporary coverage.

Simple right?

That was pretty straightforward, but now I’m going to throw you a curve ball.

There are policies that will combine these different types of life insurance.  

What!? That’s correct.

You can have a permanent life insurance policy with a term life insurance rider.  You can have a term life policy that can later be converted into a permanent life insurance policy.

Combination Coverage

All of these combinations are confusing, but are good for you, the consumer.  I know that it can be overwhelming with all of these options and choices.

However, the good news is this.  You have a higher chance of getting a policy that fits your situation when there are choices.

You are different from everyone else.  No one is like you.  Your job, your family, your health, your goals….they are all unique.  It’s a good thing that there are so many choices even if it seems daunting.

You could compare it to the purchase of new car.  Paint color, upholstery, satellite radio….the combinations are endless.

How do I choose?

Take solace that an independent agent like myself is here to help you with all of these choices. You should feel at ease that it’s not only my independence that can help you, but all of my available networks and medical underwriters. Your independent agent should have a wide range of support to shop your situation.

Independent life insurance agents are able to shop from multiple companies.  This will give you the best chance to find the right policy for your situation.  Agents who represent only one company are handcuffed to that company’s products.  If you don’t fit into their product, you are out of luck.

That’s backwards!  Think of that new car.  Do you want a car that only is red, with white interior and only standard features? Probably not.

Give me a call and let’s discuss what is important to you and let me do the heavy lifting.

I look forward to speaking with you.

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