Understanding Your Insurance Options: Life Insurance 101

October 24, 2012 by abendowment 1 Comment

An easy way to help ensure that final expenses are accounted for and your dependents are financially secure is to purchase life insurance, which will pay a set amount of money at the time of your death. This money can be used to settle debt and to help provide financial security for those dependent on you.

Choosing which type of life insurance is right for you will depend on what risk you are trying to protect against and how much you are willing to pay for the insurance.

Term Life Insurance: Perhaps the most basic and least expensive form of life insurance, term life provides protection for a specific period of time, such as to cover the same period of time as your mortgage, while children are in the home, or when children will be going off to college. Level term life offers premiums that are locked in during that time period, usually for 10, 15, 20 or 30 years, during
which premiums rates will remain level.

Permanent Life Insurance: Offers life-long protection but with higher premium rates than term life insurance. Permanent life insurance may have the option of earning dividends, although not guaranteed, that can be applied toward the premium.

Whole Life Insurance: Offers protection throughout your entire life as long as premiums are paid. This insurance includes death and living benefits by allowing loans or withdrawals against the value of the policy while still living. Any withdrawals or loans will be counted against the death benefit. Premiums remain level throughout the life of the policy, with rates usually higher than term insurance.

Universal Life Insurance: Provides permanent life insurance protection that pays the benefit amount if death occurs before the maturity date or pays the cash value (which accumulates through premiums paid over the life of the policy) if the insured is living at the maturity date. Premiums increase each year based on age.

ABE-sponsored Term Life Insurance*: ABE-sponsored 10- or 20-Year Level Term Life insurance plans offer a death benefit large enough to make a real difference to your family as well as competitive rates you can lock in for the next ten or twenty years.

Choosing the right life insurance plan is an important decision. Get the facts.ABE Personal Insurance Representatives are here to help you with your ABE-sponsored insurance needs. Call 800-621-8981 or click here for more information.

*ABE-Sponsored Term Life insurance is underwritten by New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010 under Group Policy G-29104-0 (10-yr Term) and G-29168-0 (20-yr Term) on Policy Form GMR.