Life Insurance Basics

Life Insurance Awareness Month is over, but that's no reason not to know your basics.

Laura Adams, MBA
1-minute read

September is Life Insurance Awareness Month, so before the month ends, let’s celebrate by covering the basics! There are two main types: term and permanent.

  • Term life insurance only lasts for a certain period of time, such as ten, twenty, or thirty years. It’s pure insurance and has no value other than a death benefit that’s paid to your beneficiary if you die during the policy term. It’s generally the least expensive choice for people under 50.

  • Permanent life insurance (also known as cash-value insurance) lasts until you die and there are several different kinds, such as whole life, universal life, and variable life. In addition to paying out a death benefit, it also builds up a cash value that you can withdraw or borrow.

Take a few minutes to find out if you have enough life insurance by entering your information into a Life Insurance Needs Calculator.

See my episode "What Kind of Insurance Do You Need?" for more information.

Image courtesy of Shutterstock

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.