The Basics Of Life Insurance

In the unfortunate event of your death, life insurance can provide your loved ones with funds available for funeral costs, taking care of your children, and more. Life insurance is one of the most commonly misunderstood forms of insurance. This is because many people believe that they do not need to worry about it.

However, there are several types of life insurance to be aware of ahead of time. These are compared below in this guide to life insurance. If you aren’t sure about your eligibility for each type of life insurance, you can shop life insurance today. 

Term Life Insurance

Firstly, as the name suggests, term life insurance provides financial help if your death occurs within the terms of the policy. These vary between one and thirty years, but term life insurance will not provide help to loved ones and partners when you are not covered within the policy. 

There are two main types of term life insurance because it is the most common type of life insurance. Each is defined below. 

Level Term

This is the name of a life insurance policy where the death benefits are kept the same throughout the duration of the policy. The name of these policies comes from the fact that the coverage and premiums are kept constant, regardless of someone’s age or lifestyle. 

Decreasing Term

On the other hand, decreasing term life insurance typically means that the amount of coverage decreases as the policy continues. There is usually a predetermined rate for these types of policies, so those purchasing them will be fully aware of this beforehand. 

Permanent Life Insurance

In contrast, permanent life insurance provides a consistent amount of coverage for the entire lifespan of the insured. There are more options for permanent life insurance policies, but they tend to be more expensive than term life insurance. As a result, there have been instances of people cancelling payments and ending their permanent life insurance coverage. Three of the main types of permanent life insurance are as follows. 


For these policies, the premium, as well as the death benefit, are kept the same throughout. The benefit costs are usually higher for young, healthy individuals as the insurance company are being paid to keep your premium and ensure that everything is being invested correctly. 


Universal Life Insurance (UL) earns interest over time. This allows the value to increase gradually, which means that there is the chance to provide even more financial security in the long run. Another feature of these policies is that the premiums are flexible, which makes them more suitable for someone with changing life circumstances or who wants to improve their policy over time. 

Variable Universal

Another way in which life insurance can be adjusted is with a variable universal policy. These allow individuals to invest the cash value into another account that is separate from the life insurance account. 

Similar to universal policies, variable universal life insurance allows more flexibility for people to adjust the benefits according to their preferences. These policies tend to be the ones with a slightly higher risk, due to the investments in the stock market which have the potential to lose funds in some cases. 

Why Get Life Insurance?

While it is not a legal requirement to purchase life insurance, there is a range of contributing factors that someone should consider when they are deciding whether they should get life insurance. 

It is highly recommended that anybody who is married should take out life insurance. This can help you to contribute to your partner’s wellbeing if you pass away. Because it can be difficult to predict these events, it is recommended that each partner in a marriage should take out life insurance. 

Similarly, anybody who is in a high-risk job should take out life insurance. While most workplaces have their own policies in place, it can be useful to research the best life insurance coverage that individuals in a similar occupation recommend. 

Other reasons why you should begin paying towards life insurance include if you have children, or are planning on having children. Life insurance can provide a significant amount of financial security if you pass away. Extreme hobbies and anybody that has outstanding debt should also be taken into consideration when it comes to life insurance. 

How Much Does Life Insurance Cost?

It is difficult to make conclusions about how much life insurance can be expected to cost. This is because there is a range of factors that can affect the types of policies available to you, and the different providers which will all have their own rates which differ slightly. 

Factors that can affect the price of life insurance on average include the overall length of the policy, your age, lifestyle, occupation, and medical history. These can have an impact on the monthly costs of your life insurance. 

Another thing that can affect the price of your life insurance is the type of policy you choose. More premiums usually equate to higher costs on average. Likewise, the amount needed will vary based on the number of dependents you are supporting, whether you have any outstanding debts including mortgages and if you have other sources of income such as your own business. 

Because of the range of factors that can impact the overall price of your life insurance policy, it is difficult to draw conclusions about the costs that can be expected. As a result, it is worth researching the different policies available to you. 


Life insurance is a highly important process for many people. Although it is not legally required for everyone to have life insurance, it can be highly beneficial for people who work in high-risk jobs or workplaces. Likewise, anybody who has outstanding debts, multiple dependents, and more should consider taking out life insurance. 

Something that is frequently overlooked is that life insurance policies can vary significantly. This is a result of the different types of coverage as well as the range of policies available. 

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