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Types of Life Insurance Explained

Navigating through all the different types of life insurance can seem daunting. At Aflac, we want to help simplify your search and guide you toward finding the life insurance policy that best fits your lifestyle. Let’s dive deeper into how life insurance works, the types of policies available, and how you can choose life insurance that’s best for you and your loved ones.

5 Min Read

Table of Contents

Key Takeaways

  • Life insurance can provide a death benefit to loved ones in the event of your passing.
  • There are several types of life insurance policies, each offering different levels of coverage, durations, and costs to fit various needs.
  • Aflac offers various types of life insurance policies with comprehensive coverage, including term, whole, and final expense insurance for individuals.

How does life insurance work?

Life insurance is a policy that provides a death benefit payout to beneficiaries if you pass away while it’s active. While there are various life insurance options, these plans tend to function similarly. Whether you have life insurance that lasts your entire life or just 20 years, you must pay regular premiums in order to receive your benefits.

Depending on the type of life insurance policy, there may be other features available. For instance, permanent life insurance policies offer a cash value component that grows over time and that can be used to help cover medical expenses or everyday costs of living.1

Why life insurance is important

A life insurance policy can help protect your loved ones financially in the event you unexpectedly pass away. If you die while the plan is still active, your beneficiaries may file a claim and collect a death benefit payout. The death benefit can help alleviate financial stress and allow loved ones to grieve properly. It’s usually flexible, meaning the funds can be used for funeral costs, debt everyday bills, college, and virtually any other expenses.

Types of life insurance

Each life insurance plan is distinct, so it’s crucial to understand the different life insurance policies so you can find the best option for you and your family. Here are some common types of life insurance:

Whole life insurance

Whole life insurance is a permanent coverage type that lasts your entire life. The benefit will be paid to your beneficiary whenever you pass. This may be a more expensive option upfront, but the benefits can be more secure in the long run.

Aflac offers whole life insurance for individuals that can provide guaranteed support for your loved ones on any timeline. This type of policy may be a wise move if you are hoping to factor in long-term financial planning.

Term life insurance

Term life insurance is a temporary type of policy that provides coverage for a set term or specific amount of time. At Aflac, we offer multiple term lengths in 10, 20, and 30-year increments. This plan may be a more competitive route. However, the policyholder must pass during the designated time frame of the plan for the beneficiary to receive benefits.

Final expense insurance

Final expense insurance is a type of permanent life policy that offers a smaller death benefit payout. Beneficiaries can use this payout to cover a funeral, burial costs, medical bills, and other end-of-life expenses after you pass away. Aflac offers final expense insurance with fixed and reasonable premiums.

Group life insurance

As a business owner, it’s important to make sure your employees feel safe and seen. Group life insurance is a great type of policy if you are looking to provide benefits for your employees or members of an organization. Aflac gives you the opportunity to offer your hard workers term or whole group life insurance options.

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Which life insurance policy type is best for me?

The right type of life insurance policy for you depends on important factors such as how much you are looking to spend on premium payments, how much coverage would you like to secure for your family, and the access to cash benefits. For instance, if you're starting a family and only need coverage until your children become adults, you may consider a term life policy.

How to get a life insurance policy

Take these steps to get the right type of life insurance policy for your needs:

  1. Apply and take the medical exam: Once you have found a policy that meets your needs, you can fill out an application and take a medical exam. This is to ensure that the insurance company understands any pre-existing conditions or risks associated with your lifestyle.

  2. Receive coverage: After completing all the necessary paperwork, you can get the type of life insurance policy you need. The policy will include a death benefit amount, premiums, and other features depending on your individual requirements.

  3. Adjust your life insurance policy as needed: Once the life insurance policy is in place, it's important to review it periodically to ensure that it meets your needs and remains up to date with any changes in your lifestyle or health. For instance, if you're starting a family, you may want to increase the death benefit amount.

Aflac offers various types of life insurance

At Aflac, we offer various life insurance policies that are flexible to help meet your needs, including whole and term life insurance policies for individuals. Our individual plans can be purchased directly through Aflac and are portable, so you can take them with you if you move or change jobs. Start chatting with an agent and get a quote today to find out which type of coverage if best for your loved ones.

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Learn more about Aflac products for Individuals & Families: