Sep 18 2009 12:50 PM

What types of life insurance should I consider to protect my family if I die?

There are three common types of life insurance:

1. Term life insurance covers you for a set period of time only. For instance, a 20-year term policy means that if you die within that 20 year period, your loved ones would receive a pre-selected amount of money. If the 20 years pass and you are still alive, the policy expires and has no value.

2. Whole life insurance covers you for your entire life and pays your beneficiaries no matter your age when you die. You pay fixed premiums that pay for life insurance in addition to an investment account that accumulates cash value over time.

3. Universal life insurance covers you for your entire life and pays your beneficiaries no matter when you die. Instead of flat premiums, you can vary the amount you pay. Many policies also allow you to pay your premiums using the cash value that has accumulated in your account.

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Laura Adams is a personal finance expert and award-winning author who is Senior Insurance Analyst for InsuranceQuotes.com. She represents Bankrate Insurance’s web properties in the media and works as an advocate to make sure consumers protect their financial futures by having the right kinds of insurance.

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