Life insurance policies pay money (called benefits) to selected people or organizations (beneficiaries) when you pass away. 

People usually buy life insurance policies for themselves. But, life insurance policies can be taken out by spouses or anyone who can prove they depend on the person financially or have an "insurable interest" in that person. 

Which type of life insurance policy should I get? 

• Life insurance policies fall into two categories: term life insurance policies and cash value life insurance policies. 
• There are many different subtypes of life insurance policies that make up those categories. 
• You should choose a policy with features that fit your situation. 
• The NAIC Life Insurance Buyers Guide shares information on policy types and what to think about when you buy a policy. 
• The department of insurance in your jurisdiction can answer your questions about life insurance policies. 

What is term life insurance? 

• Term life insurance is a policy you buy for a certain period of time (a term), like a ten-year or 20-year period. 
• The policy pays money to the named beneficiaries if the insured person passes away during the term. 
• Term life insurance is designed to provide lower-cost coverage for a specific period. 
• Term life policies may allow coverage to continue (renew) at the end of the term, even if your health status has changed.
• However, if you renew, the amount you pay for coverage (a premium) may be more than the original policy.  Ask what the premiums will be before you renew. 
• Ask your insurer if you lose the option to renew your policy at a certain age. If the policy is non-renewable, you will need to apply for new coverage at the end of the term. 

What is a cash value life insurance policy? 

• A cash value life insurance policy is a permanent policy that you can keep it for as long as you choose. 
• These policies also have savings and/or investment features, which make it possible for policyholders to get money from the policy while they’re still alive. 
• Whole life, universal life, and variable life are types of cash value policies.

Do I need life insurance? What should I ask myself when considering a life insurance policy?

• How much of the family income do I provide?
• Will these financial obligations change over time?
• Knowing that the risk of death increases each year, in how many years do you anticipate the need for death benefits? 

What should I ask my insurer about life insurance policies?

• Do I pay the premiums on a set schedule?
• Does the policy have a cash value?
• Do the policy values change from year to year?
• What part of the premium or policy value isn’t guaranteed?
• Are there guaranteed minimums on my policy?

What else should I know about life insurance?

• If you already have life insurance, it’s important to compare your current policy with any new policy you might consider. Keep in mind that any changes in your health may affect your ability to get a new policy or the premium that you’ll pay. 
• Don’t cancel a current policy until you've bought a new policy. 
• Before you buy a life insurance policy, be sure you can afford the premium. The premiums for many life insurance policies are sensitive to changes in the company’s investment earnings, claim costs, and other expenses.