Everyone has different goals when it comes to life insurance, and finding the right type of life insurance depends on your needs. If you have a spouse or kids, your priority may be protecting your family’s financial future. If you’re single, you might focus on covering funeral costs to ease the burden on loved ones. Whatever your reason, there’s a policy to suit your needs.

What are the most common types of life insurance?

Life insurance falls into two broad categories: term and permanent. Each type has policies to serve various circumstances and budgets. Here are a few of the most common types of life insurance.

What types of life insurance policies are there?

Term life insurance

Term life insurance covers you for a specific period of time, typically 10-30 years. If you pass away while the policy is active, your beneficiaries receive a lump-sum payment, known as the death benefit. Term life is considered “pure insurance” since it does not accumulate cash value or have a savings component.

Purchasing a term life policy locks you into a specific rate and carries lower premiums than other types of insurance. Term policies are ideal for those who need coverage for a certain number of years, such as young families or someone looking to cover a debt such as a mortgage.

The exact cost of term insurance varies based on your age and overall health. However, older individuals shouldn’t immediately rule out a term policy, as it can be a convenient option for seniors looking for financial protection. Fidelity Life offers affordable term policies for older adults with RAPIDecision® Senior Life plans.

Whole life insurance

Whole life is similar to term insurance in that it offers a death benefit to your beneficiaries in exchange for your premium payments. Unlike term policies, whole life insurance doesn’t expire and has a built-in savings element.

With whole life policies, a portion of your premiums accrues as cash value that you can borrow from should a need arise. These features make whole life insurance attractive to seniors looking for lifelong coverage and growth.

Fidelity Life RAPIDecision® Senior Whole Life plans offer permanent life insurance solutions for people between the ages of 50 and 85.

Accidental death benefit insurance

Accidental death benefit (ADB) insurance can be purchased as a standalone policy or added as a rider to another life insurance policy. People who aren’t eligible for other life insurance products (such as those in high-risk jobs) may find accidental death benefit insurance a good option.

Unlike other products, you can purchase an ADB policy regardless of your occupation or health status. And the ADB policy pays out if you die as a result of a covered accident, or a covered death within 90 days of an accident.

Final expense insurance

It’s no secret that end-of-life costs can be expensive. The average funeral is just shy of $8,000 and even higher in some states. Final expense insurance can help alleviate the financial burden on loved ones by covering the costs of your funeral, burial, and other final expenses.

Final expense insurance is permanent coverage, meaning it accrues cash value and doesn’t expire as long as you continue paying your premiums. It’s an affordable option for older adults who don’t have money saved for their funeral or want to leave a small legacy.

What life insurance should I get?

Now that you understand some of the different options available, you might be wondering how to choose life insurance. Here are a few questions to help determine the right life insurance for your situation.

• How much coverage do I need? Start by identifying the expenses you need your policy to cover, such as outstanding debts, basic living expenses, and funeral costs. You want to ensure the death benefit is enough to replace your income and leave your family with a financial cushion. If you have school-aged children, you may want to factor in college costs when choosing your coverage.
• What type of life insurance should I get? All life insurance policies are either temporary or permanent. If you’re interested in lifelong protection and the ability to accrue cash value, permanent coverage might be the best fit. On the other hand, term insurance makes sense if you need life insurance for a set number of years (such as until your children turn 18).
• How much insurance can I afford? Affordability is an important factor in choosing insurance. If you have a limited budget, term insurance offers lower premiums but only protects you for a specific number of years. Keep in mind it’s important to buy adequate coverage based on your current and future financial needs and goals. For example, if you have a mortgage and multiple children to put through college, consider a large enough policy to support your family through these milestones.
• When should I get life insurance? The right time to purchase a life insurance policy is different for everyone and depends on your specific circumstances. Life insurance is recommended when you become financially responsible for someone else, such as a spouse or child. Anyone with dependents should carry a life insurance policy, especially if you are the primary breadwinner in your household.

Though you never know what life may bring, you can decide the legacy you leave behind. Knowing which type of life insurance policy is best for your situation can help you do that. Choose a policy that fulfills your needs, helps you achieve your goals, and fits your budget, then sit back and enjoy greater peace of mind.

If you’re still unsure which life insurance is best for you, let an agent walk you through your options. Call us at (855) 291-6365 or get your online quote today!