Signing up for a life insurance policy can be a smart purchase. Use the following guide to learn about the diﬀerent types of life insurance policies, how they work and why you may want to consider purchasing a life insurance policy.
A life insurance policy is a contract between you and an insurance company. You agree to pay the insurance company a set amount of money each month (or year) for a predetermined length of time. If you pass away while the policy is still in force, the insurance company would typically then make a payment to a beneficiary of your choosing, most often a spouse, sibling, child or grandchild.
Your death can leave your loved ones with a financial burden. Here are some potential expenses your beneficiaries could face.
A life insurance policy is designed to protect against such situations. The last thing you would want is for your loved ones to experience a financial hardship after you’re no longer around to provide for them.
As a general rule of thumb, anyone who has someone depending upon them financially may want to consider life insurance. Some examples include:
Even single people with no financial dependents may want to consider life insurance to help protect loved ones from shouldering the cost of a funeral. Plus, life insurance is generally less expensive the younger you are, so locking in a lower rate while you’re still young can potentially work to your advantage if you do get married or start a family later in life.
There are several diﬀerent types of life insurance policies, all of which are designed for diﬀerent needs and financial situations. Life insurance policies can be generally placed into one of two basic categories: Term or permanent life insurance.
Term life insurance
A term life insurance policy is a temporary form of coverage that can generally last for somewhere between 10 and 30 years. If the insured individual were to die during this time, a payout would typically be made to their beneficiary or beneficiaries. If the individual were to live past the end date of their coverage, the policy would simply expire in most cases.
There are several diﬀerent types of term life insurance policies, as well as a number of diﬀerent policy variations and features.
Permanent life insurance can oﬀer coverage for the rest of the insured individual’s life. As long as you continue to pay your policy premiums on time, a permanent life insurance policy may help ensure that your beneficiary will receive a payout when you pass away.
Permanent life insurance policies can include some extra features not often found in term life insurance, such as the opportunity to build cash values.
Like term life insurance, there are diﬀerent types of permanent life insurance policies from which to choose.
There are three steps that can be critical when buying a life insurance policy:
An AIG-appointed life insurance agent can help you determine the life insurance policy option that’s best for your needs. Call 866-971-4232 to work with an agent who can help you find a life insurance policy that will provide your loved ones with the protection they deserve.
Agency services provided by AIG Direct Insurance Services, Inc. ("AIG Direct"), CA license # 0B57619 and AR license # 0100105378, a subsidiary of American General Life Insurance Company ("AGL"), Houston, TX and an affiliate of The United States Life Insurance Company in the City of New York ("US Life"), New York, NY, all members of American International Group ("AIG").
Policies issued by: American General Life Insurance Company (AGL), Policy Form Numbers ICC16-16901, 16901, ICC16-16900 and 16900 except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Numbers 16901N and 16900N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). Products may not be available in all states and product features including rates may vary by state. All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company. ©2018. All rights reserved.
Guaranteed Life Insurance: No Health Questions Asked
What if you didn't have to worry about being approved for a life insurance policy? With guaranteed issue life insurance, you don't have to.
Life Insurance Coverage with No Health Questions, Guaranteed
If you have been denied life insurance coverage due to your health, consider Guaranteed Issue Whole Life Insurance with no health questions required.