Proceeds from life insurance policy not only can cover funeral expenses but can also be used to replace income and pay off debt. Some life insurance policies include living benefit riders that allow the insured the ability to access part of the death benefits while still alive.
Term life insurance provides coverage for specific period (10, 15, 20, or 30 years) at a fixed premium rate. Term life insurance is generally more affordable but does not build cash value. Many term policies are renewable regardless of your health condition while some are not. Some term policies can be converted to whole life regardless of the insured’s health condition. Term policies that cannot be converted nor renewed will be terminated at the end of the coverage period.
Whole life insurance (permanent life insurance) is cash value life insurance that provides lifelong coverage. Whole life insurance premium is usually higher than term insurance however the death benefit is guaranteed for the life of the policy.
