life_insuranceFlorida life insurance policies provide a benefit in exchange for your premium payments where the insurer is required to pay a certain sum (a lump sum or portions of smaller sums) to your beneficiary (persons you choose) in the event of your death.

There are two major types of life insurance: Term Life Insurance and Permanent Life Insurance. Both types can then be further broken down into categories.

Term Insurance

Term insurance is a temporary policy providing coverage for a specified period of time. With a term life policy, you pay an annual premium to cover the risk of death. This type of life insurance has no cash value so no benefits are paid when the policy is expired or if you die after the policy has expired. If the insured dies during the specified period of time (term), his/her beneficiary will receive the value of the policy.

Some of the different types of term life insurance available to Florida residents include Renewable Term (can be renewed at the end of the specified term without evidence of insurability), Level Term (which guarantees a lump sum paid on the event of death with the sum remaining the same for the whole term period), Increasing/Decreasing Term Insurance (often purchased by those having financial obligations like a mortgage or loan that tend to decrease over time), Convertible Term Insurance (allows the policyholder to convert from the Term policy to a Permanent Life Insurance policy without additional evidence of insurability) and Return of Premium Term Insurance or ROP (which combines low premiums for protection during specified terms with a guaranteed refund of the premiums you pay during the level term period, on condition the insured person is still living at the end of the term).

life insurance 02Permanent Insurance

Florida permanent insurance offers protection throughout your lifetime and includes an option to build cash value. This reserve of cash can be withdrawn or borrowed by the policy owner, often with favorable tax treatment.

There are several types of permanent life insurance policies. They differ in flexibility of premium payments, the way the cash value is invested, and the death benefit guarantees. Major permanent life insurance types include Whole Life Insurance (a form of Permanent Insurance which covers you for your entire life, does not have to be renewed and does not expire provided you regularly pay premiums), Universal Life Insurance (which has an advantage of more flexibility than Whole Life Insurance by offering flexibility in premium payments and death benefits, as well as an opportunity to change both of them if circumstances change), and Variable Life Insurance (a form of Life Insurance with a wider selection of investment products, including stock funds).

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