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Types of Life Insurance

When deciding which type and amount of life insurance is right for you, you'll need to answer these important questions:

  • What do you want the insurance to cover?

  • What amount of coverage do you need?

  • How long will you need the coverage for?

  • What's your budget?

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Understanding the Different Types of Life Policies

Answering those questions can help you understand which type of life insurance would work for your situation.

The two main types are:

  • Term, which provides temporary coverage.
  • Permanent, which provides coverage for the rest of your life.

Within both of these main types of life insurance are different types of policies.

The table below outlines various types of policies, including different types within term and permanent life, and what they typically offer. For more information on a specific type, click its name.

 

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Life Insurance product table
Term Life
Insurance
Universal Life
Insurance
Indexed Universal Life
Insurance
Survivorship Universal Life
Insurance
Variable Universal Life
Insurance
Temporary
Coverage
Yes Not Applicable Not Applicable Not Applicable Not Applicable
Permanent
Coverage
Not Applicable Yes Yes Yes Yes
Provides a Guaranteed
Death Benefit
Yes Yes Yes Yes Yes
Focuses on
Affordability
Yes Not Applicable Not Applicable Not Applicable Not Applicable
Can Provide
Coverage for
Your Lifetime
Not Applicable Yes Yes Yes Yes
Covers Two Lives
With One Policy
Not Applicable Not Applicable Not Applicable Yes Not Applicable
Has the Potential to
Build Cash Value
Not Applicable Yes Yes Yes Yes
Offers Growth
Potential Based on
Performance of Index
Not Applicable Not Applicable Yes Not Applicable Not Applicable
Offers Growth
Potential Based on
Market Performance
Not Applicable Not Applicable Not Applicable Not Applicable Yes
Features a
Tax-Advantaged
Death Benefit
Yes Yes Yes Yes Yes
Includes the
Ability to Access
Money in Your Policy
Not Applicable Yes Yes Yes Yes
Offers Riders
to Customize
Your Policy
Yes Yes Yes Yes Yes
Term Life
Insurance
Universal Life
Insurance
Indexed Universal Life
Insurance
Survivorship Universal Life
Insurance
Variable Universal Life
Insurance

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Negotiating Life's Changing Needs

For most people, different times in their lives may require more coverage than others. Wherever you are in exploring how life insurance can help, several strategies can help you address your evolving needs and fit within your current budget. You can:

  • Buy a policy now that more than covers your current needs and may help protect your future.
  • Buy an initial policy now and then a supplemental policy later.
  • Start with Term and convert to Permanent later.
  • Purchase both Term and Permanent policies to get the benefits from the different features they offer.
  • Add optional features, also known as riders, to broaden the coverage that a particular policy provides.

When determining what to buy when, it is worth remembering that the younger you are when you buy, the more cost-effective it will likely be.

 

How Life Insurance Needs Can Change Over Time

You need an approach that helps you avoid buying insurance that does not last long enough and buying permanent insurance for temporary needs.

 

This chart shows how a person's life insurance needs could change over time. On the extreme left of the chart we see an image of a single woman who has few responsibilities that would necessitate life insurance so her amount of coverage needed as represented by a bar is low. But as her life changes and we move to the right of the chart, we see her get married and settle down, purchase a home, and have children. These life changes can cause her coverage needs to rise. This need can reach a peak as we continue on to the right—she now could need life insurance to help protect her income, help support her spouse, and pay for the college education expenses of her children if something were to happen to her. Moving on, her coverage need starts to decline as her children finish college, as they become independent, and as she pays off her mortgage. Finally, at the extreme right of the chart her coverage need drops to a lower level. At this stage, her needs may be to be able to provide funds for final expenses, retirement income for her spouse, and a financial legacy to her beneficiaries.

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Life insurance is issued by The Prudential Insurance Company of America, Pruco Life Insurance Company (except in NY and/or NJ), and Pruco Life Insurance Company of New Jersey (in NY and/or NJ). Securities are offered through Pruco Securities, LLC. Each is a Prudential Financial company located in Newark, NJ, and each is solely responsible for its own financial obligations. 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. All guarantees are based on the claims-paying ability of the issuer and do not apply to the underlying investment options, if any. Unpaid loans and withdrawals will cause a reduction in cash values and death benefits and may have tax consequences. All benefits, riders, and product features may not be available in all states. Additional limitations may apply based on age and underwriting. Some riders are available at an additional cost.

For variable policies, please consider the investment objectives, risks, and charges and expenses carefully before investing in the contract, and/or underlying portfolios. The prospectus, and, if available, the summary prospectus, contain this information as well as other important information. You can obtain a copy of the prospectus here. You should read the prospectus carefully before investing. It is possible to lose money by investing in securities.

 

For Compliance Use Only: 1009104-00001-00