What You Need to Know About Life Insurance

Life insurance is one of the best things you can do for the people you love. It can provide a financial safety net for your family, pay off debts and help you leave behind a legacy.

There are a variety of types of life insurance, with each policy type providing different benefits and features. Learn more about them so you can make an informed decision.


There are a lot of different types of life insurance, and the best one for you depends on your needs and budget. There are term life policies that last for a certain period of time and don’t accumulate cash value, as well as permanent ones, such as whole life or universal life, which can last for your entire lifetime and build up cash value.

Many types of life insurance offer riders that allow you to customize your coverage to meet your specific needs. For example, a critical illness rider can help you pay for medical bills if you become sick and aren’t able to work, or an accelerated death benefit rider can make your policy more flexible in the event you get diagnosed with a terminal illness.


Life insurance is the exchange of a relatively small payment each month (known as a premium) for a very large sum of money if you die (known as a death benefit). A high enough death benefit can cover your final expenses and leave your loved ones with financial security.

In addition to helping your beneficiaries pay for your final expenses, life insurance provides a number of other benefits. For example, it can help them cover mortgage payments and children’s college tuition in your absence.

Whole life and universal life policies can also offer living benefits, which are extra features that the policy owner can access while they’re alive. These living benefits typically include a cash value that accumulates over time and can be used to cover certain expenses.


The premiums associated with life insurance are the money you pay to the insurer in exchange for your coverage. They are a necessary part of the overall life insurance process to help protect your financial security.

Premiums are calculated based on two underlying concepts: mortality tables and interest earnings. Mortality tables show the average number of deaths among people in a specific age group, while interest earnings assume the company earns a certain rate of return on its investments.

Besides mortality and interest, your policy’s cost is also impacted by the life insurer’s operating expenses. It uses a portion of your premiums to cover liabilities and other costs, like salaries, office space and legal fees. The remaining amount is invested to grow and improve the company’s financial strength, thereby reducing the overall cost of their products to policyholders.


A rider is an additional insurance benefit that can be added to your life policy. These riders help you customize your coverage, based on your needs and priorities.

Riders are also an excellent way to protect your family from financial instability in the event of your death. They offer many different benefits, and can be a great addition to your policy.

Some of the most common riders include accidental death and dismemberment, accelerated death benefits, waiver of premium, return of premium and critical illness. These riders offer increased protection at a low cost and can make it easier to meet your family’s financial goals.


Underwriting is the process that life insurance companies use to determine if you qualify for a policy. It involves reviewing your application information and health records to help the insurer set your premium level.

Your age, gender and other factors play a role in determining your risk levels. The more risk you pose, the higher your premiums.

In addition to the information you provide on your application, life insurance underwriters can also request additional tests and reports from your doctor or a medical clinic to gather more data. The more data they have, the better picture they can paint of your risk profile.

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