Term Life Insurance Basics

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There are several different types of life insurance, all with a common purpose - to protect your loved ones from bearing a large financial burden in the event of your death.

Your needs will change throughout your life, so it's important to understand the basics and periodically review your coverage to ensure that it's still right for you. There are two basic types of insurance - temporary insurance, which includes Term Life and Group Life, and permanent insurance, which includes Whole Life, Universal Life, and Variable Universal Life. If you purchase life insurance, when you die the insurance company will pay a death benefit to the beneficiary or organization named in the policy. (In the case of temporary insurance, your death must be during the policy term.)

Temporary insurance

 

  • Term Life is one of the simplest, most cost-effective types of life insurance. Generally, it provides the largest immediate amount of protection at the lowest cost.
    With Term Life, your beneficiaries are paid the face amount of your policy (subject to policy provisions) if you die during the term, which is typically from five to 30 years.
    People who purchase Term Life generally have a substantial need for insurance protection during a specific period of time. They may be young, have growing families and need temporary protection now with the option to convert to permanent coverage later.
    from some of the country's highly rated Term Life insurance providers online through Insurance Central.

  • Group Life insurance is typically offered as an employee benefit. Premiums under group policies are generally lower for younger employees and increase with age.
    In addition to employers, some membership organizations, such as unions and alumni clubs, also offer Group Life insurance plans.

Permanent insurance

 

  • Whole Life insurance combines the security of lifetime insurance protection with the advantages of tax-deferred cash accumulation.
    In addition to providing a death benefit, Whole Life policies also guarantee that premiums will remain level throughout the life of the policy. This enables owners to build the cost of their coverage into their long-term financial plans.
    People who purchase Whole Life generally want to ensure that, when they die, money will be available to pay final expenses, fund college costs, or simply allow loved ones to maintain their lifestyle.

  • Universal Life insurance combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation.
    The difference between Universal Life and other forms of permanent coverage is the flexibility it offers. Within certain limits, policy owners can increase or decrease their death benefit according to their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease, or cease. Similar to Whole Life insurance, Universal Life coverage can ensure that money will be available to pay final expenses, help fund college costs, or simply allow loved ones to maintain their lifestyle.

  • Variable Universal Life insurance (also known as "VUL") combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation through investments.
    The difference between VUL and other forms of permanent coverage is the flexibility and growth potential it offers. Policy owners determine how the assets within the policy are invested depending on their tolerance for risk and the amount of time over which they will be investing.
    Within certain limits, policy owners can increase or decrease their death benefit depending on their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease or cease paying premiums altogether, provided the policy has sufficient cash value.
    People who purchase VUL generally want to ensure that money will be available to pay final expenses, help fund college costs, or simply allow loved ones to maintain their lifestyle.
    They also like the idea of controlling how their cash values are invested and are willing to assume some market risk to create a life insurance program that adjusts to economic conditions.

How much do I need?

Life insurance is intended to provide for your family's financial security and help bring peace of mind. Calculating the right amount of coverage depends upon your personal goals and objectives. Many insurance companies recommend that your total life insurance coverage should equal five to eight times your annual income. Many people use a combination of different types of life insurance listed above to meet changing needs over the course of a lifetime. To learn more about life insurance, read our

When you elect to schedule a call, you will leave wellsfargofinancial.com and go to the Wells Fargo Insurance web pages at wellsfargo.com. Wells Fargo Insurance offers a wide range of products from companies with high standards and excellent customer service.

Insurance products are available through Wells Fargo Insurance, Inc. (Minneapolis, Minnesota). Wells Fargo Insurance, Inc. is a licensed agency representing and compensated by the insurer based on the amount of insurance sold. Wells Fargo Insurance, Inc. is an affiliate of Wells Fargo Financial.

  • Insurance is:
  • Not a deposit of or guaranteed by the bank
  • Not insured by the FDIC or any federal government agency