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What Type of Life Insurance is Right for You?

Nov 02, 2020 3 min read


We know it’s not easy to choose a life insurance policy, just thinking about it can be difficult to do. Understanding the types of life insurance policies and what questions to consider can help you make the best decision for your unique needs.

1. There are two types of life insurance, permanent or term; the difference between the two simply lies in the following:

  • Term life insurance: refers to insurance focused on a defined term in time. Choose how long you want coverage to last (for example, 10, 20 or 30 years) and make regular premium payments during that time period. If you die during the time that you are covered and your beneficiaries receive the death benefit.
  • Permanent life insurance: Permanent life insurance is long-term insurance protection. There are two key features of permanent insurance that distinguish it from term insurance:
    • A permanent policy can last your entire life as long as the required premiums are paid.
    • Most permanent policies offer the ability to generate cash value, and these funds can be used for many purposes by taking loans or withdrawals from your policy. However, outstanding loans and withdrawals will reduce policy cash and the death benefit and may have tax consequences.

2. There are different types of life insurance. For each one, you must take into account different features and benefits since it is not a “one fits all” solution- it’s meant to adjust to your needs and reality. For example, you would consider whether or not you’re married, how many children you have, if you are an employee or have your own business. It is also important to know what stage of life you are in, and what are your plans for retirement.

3. Last but not least, we put together a list of considerations for you to keep in mind. Whenever you think about life insurance you should ask yourself the following questions:

What are your needs?

What or who are you trying to protect (your family, a business loan, loss of your income, cancel a mortgage, supplement retirement, etc.?)

What is your budget?

Knowing how much you can afford will help you find the right policy at the right price. In addition, what’s the best option to pay for your premiums – look for options to

Are you looking for a policy that has the potential to generate "cash value"?

If not, you may want a simple policy to help your family cover final expenses.

How long do you want or need coverage?

If you want your coverage to last a lifetime, consider a permanent policy. A term policy would be more appropriate if you want coverage for a fixed period of time such as 10 or 30 years.

What are your goals? Include a checklist to ensure everything related is covered:

  • Take care of my family financially.
  • Leave a legacy for my family.
  • Create another source of income for my retirement.
  • Have access to life insurance money in case I get sick and can't work.
  • Reduce or offset taxes
  • Protect or continue my business

Who are your beneficiaries?

Your beneficiaries are the people who will receive the funds from your policy when you die. You can choose a single beneficiary to receive the full amount, or divide the payment between family, friends or charities.

Did you know that life insurance can help you while you live?

Beyond providing a death benefit to your beneficiaries when you die, some (cash value) policies also have what are called “living benefits” that you can access while you are alive. Learn more about living benefits.

To choose the best possible option that will help you get the right coverage that’s right for you we recommend you speak to one of our experienced financial professionals. They have the knowledge to help you based on your particular needs and can answer any of your questions. Our commitment is to support you, to understand your needs and be by your side so you can start planning for financial wellness… because you get more with PRU.


© 2020 Prudential Financial, Inc. and its related entities.

Not Insured by FDIC, NCUSIF, or Any Federal Government Agency. May Lose Value.

Not a Deposit of or Guaranteed by Any Bank, Credit Union, Bank Affiliate, or Credit Union Affiliate.

Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Our policies contain exclusions, limitations, reductions in benefits, and terms for keeping them in force. A financial professional can provide you with costs and complete details.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. If you would like information about your particular investment needs, please contact a financial professional.


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