Three kinds of coverage. One question to start.
The question is not "which policy is best". It is "what has to keep going if you are not here". The mortgage. The kids' school. A spouse's income. Once that is clear, the right kind of coverage usually picks itself.
Term life
Coverage for a set number of years, often 10, 20, or 30. If you pass away during the term, your family receives the benefit. If the term ends, the coverage ends. It is the simplest kind and usually the most affordable for the amount of protection, which is why it suits people with a mortgage, young children, or income others depend on.
Whole life
Coverage meant to last your whole life, with a cash value that builds over time. Premiums are higher than term for the same benefit, because part of what you pay goes into that cash value. People choose it for lifelong needs, such as final expenses or leaving something behind regardless of when they pass.
Indexed universal life (IUL)
Permanent coverage where the cash value can grow based on the movement of a market index, within limits set by the carrier. Those limits, the caps and floors, are part of the contract and change by product. It is more flexible than whole life and more involved, so it fits people who want coverage and a cash value they can work with, and who are comfortable understanding how the growth is calculated.
Living benefits
Many modern policies let you use part of the benefit while you are alive, after a serious diagnosis such as a heart attack, stroke, or cancer. The details differ by carrier and policy. It is worth asking about, because it changes what the coverage is for.
Who each one tends to fit
- Term: a mortgage, children at home, a working spouse, a business loan. Big protection, set budget.
- Whole life: a need that never expires, such as final expenses or a legacy gift.
- IUL: permanent coverage plus a cash value you intend to use, with a willingness to understand the mechanics.
Plenty of families end up with a mix. That is normal.
Not sure which fits?
Ask the assistant on the home page, or call and ask a person.