Term life insurance is the most common form of coverage. It really isn't for you at all. Term life insurance helps your family or loved ones pay the bills if something unforeseen (like premature passing) happens to you and you are no longer able to contribute with your income. This type of coverage protects your family for a specified "term" or specified number of years. Makes sense, right? The idea is that after this "term" you will no longer need as much life insurance. Why? Because the hope is, as time passes your kids will become adults, your house will be paid off (yes!), and your income will be replaced by retirement savings. This type of coverage is typically cheaper and it's very likely people who have term life insurance will outlive their policy term. Common terms are 10, 20, and 30 years. So basically, you can get more coverage or a higher face amount for less money with term. Clever's term life policies are all convertible to whole life coverage before the term ends or before a certain age. The privilege to convert or switch the policy is pretty cool because the customer can do this without being asked any new medical questions at the time of the switch.
Whole Life insurance protects someone for their "whole" life. Sometimes called "permanent life insurance", this insurance cannot be canceled by the insurance company and provides coverage until you pass away. The only way for you to stop coverage is to request a stop or simply quit paying for it. Whole lIfe insurance is the type of life insurance that builds a cash surrender value. Once the house is paid off and the kids are grown, you have less initial need for life insurance and would be able to "cash" it in and receive values back from your life insurance. Term Life insurance does not do this. Really, no other type of insurance can provide cash back to you at the time the insurance is no longer needed. This cash may also be set up on a lifetime plan, sending you a monthly check for the rest of your life if you choose. Pretty sweet, huh? As you age, you may still need some life insurance (just not what you needed back when expenses were high and debt was plentiful). You have the option to stop paying premiums on your whole life insurance and take a lesser benefit amount as a paid-up plan. The longer you pay the premiums, the more the benefit amount will be. This type of coverage works very well as a gift to children. Rates are based on age and are at their lowest when young. The child can then be protected against situations regarding insurability. This coverage may stay in force for as long as needed even if the child, or later the adult, cannot get life insurance due to cancer, heart disease, or certain other health conditions.
Get the best of both. Over age 15, you may be able to purchase a whole life policy with a term life rider attached. Customize this option with some of the permanent coverage with some of the less expensive term coverage for a chosen amount of time. Talk about Clever!
Clever offers tons of other types of coverage, from an accidental death benefit rider to a waiver of premium rider and beyond. Want to learn more about these selections? Click here to view the whole list of coverage options and read more about them.