Explore life insurance

Life insurance pays a death benefit when you die. As long as you pay the premiums and die while the policy is in force, your beneficiary will receive the amount you choose.

Permanent life insurance is available in several forms. Which type is best for you depends on what you want from your policy and how much flexibility you want. The four types of permanent life insurance are:

• Whole life insurance is the most common type of permanent life. You get a guaranteed benefit, a consistent premium, and earnings on your cash value.
• Universal life allows you to change your premium payments. You can increase or decrease premiums and the death benefit based on your changing needs.
• Variable life lets you invest policy premiums and is riskier than other types of permanent life. Your death benefit is based on how your investments perform.
• Variable universal life insurance is a combination of variable and universal life. You can vary payments, invest in premiums, and change coverage amount.

Whole life is a type of permanent life insurance. You’re guaranteed a death benefit and the policies have a cash value. That allows you to tap into them if needed. Meanwhile, term life insurance is for a limited number of years, such as 20 or 30 years. Term life is usually more affordable than whole life. However, you may outlive your policy, and the insurer won’t have to pay a death benefit. You can usually convert your term life policy to permanent life as you near the end of the period.

Riders are a way to get additional coverage on term life. Common types of riders are:

• Long-term care
• Accelerated death benefit
• Critical illness rider
• Accidental death and dismemberment
• Critical illness and chronic illness.

These add-ons can help you in ways beyond a death benefit. Riders add to the cost of your policy, but also add additional benefits.

Many term life policies let you convert the entire term policy or a portion to permanent life. The insurer may allow this as you’re approaching the end of your term life. However, insurers also usually limit conversions to people before they turn 65. The later that you convert your term life, the likelier you’ll pay higher premiums, as your age is considered.

Finding a loved one’s life insurance policy isn’t always easy. That’s why it’s critical for family members to communicate about policies while they’re still alive. You don’t have to tell your loved ones what they might receive. Just let them know where to find the policy. If you need to find a policy, there are a few avenues:

• Contact other family members and the person’s lawyer, banker or accountant. 
• Seek canceled checks and credit card statements to see if you can find any written to a life insurance company.
• Review probate court records.
• Contact the person’s employer to see if they had a group life insurance plan.
• Check with the state's insurance regulator.
• If those actions don’t work, notify the MIB, which maintains a database of life, health and disability applications for seven years. Record searches can be requested through the MIB and cost $75.

Return of premium life insurance is a term life policy that gives you back your premiums if you outlive your policy. This coverage is much more expensive than regular term life insurance. However, it offers peace of mind that you’ll get back the money you paid.

Some life insurance companies offer instant approval. These policies don’t require a medical exam. You might not even have to answer questions about your medical history. This coverage could be the only option for someone in poor health. Instant approval term life is more expensive and offers lower payouts than regular term life insurance. 

Group life insurance is coverage you get through an employer or association. Employers may offer coverage for free or for a low premium. Group life insurance may not be enough coverage, and you may lose it when you change jobs. It’s a good idea to get your own permanent life or term life policy even if you have group life coverage.

AD&D insurance pays you and beneficiaries if an accident caused your death or dismemberment. Many companies offer this coverage for free. You shouldn’t think of AD&D insurance as a replacement for life insurance. There are restrictions on when an insurer will pay out. Also, life insurance policies often offer an accidental death rider, which increases the death benefit if you die in an accident.

Smokers pay more than nonsmokers for life insurance. Being in poor health also leads to higher premiums and may limit your life insurance options. See more about how smoking and health status affects rates below.

The older you are, the more you’ll likely pay for life insurance. This is especially true for term life insurance. If you’re 30 and take out a 20-year term policy, you’ll pay much less than someone who’s 50. Gender also influences rates. Men usually pay higher rates because they typically don’t live as long as women.