Life Insurance 101

Life Insurance 101 image

Taking care of our families and loved ones is important, and one of the best ways to do this is by purchasing a life insurance policy. It isn't a complicated process, and it doesn't have to cost you a lot of money, but it's best to have some knowledge about life insurance before you buy.


There are three basic types of life insurance. They are:

  • Term Life – this is generally the simplest and least expensive type of life insurance. Basically, you purchase the insurance for a term, like 30 years, and pay a minimal amount on a regular basis. The benefits of Term Life is that it is affordable and pays a lump sum benefit to your beneficiaries if you die.
  • Whole Life – this policy has the benefit of a fixed premium, which cannot change over the life of the policy. It also allows for tax-deferred cash accumulation. This means that the policy can increase in value over time. However, it is more expensive than Term Life, but generally has a higher payout.
  • Universal Life – this is the most versatile type of life insurance policy.  In addition to accumulating cash value, it also allows you to withdraw money from the policy during your lifetime and allows for premium flexibility.

Bear in mind that the examples above are the standard types of life insurance, but there are many different types of policies that can be customized to fit your specific needs.


This article is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that FBMC is not rendering professional or medical advice and assumes no liability in connection with its use.


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