Life Insurance
Three types of policy and three different ways of paying out. Which one fits depends on how long the need lasts.
Anyone whose income is holding something up.
- Households where other people depend on one income.
- Anyone who needs a large amount of coverage on a limited budget, which is what term life is built for.
- Anyone who wants coverage that lasts for life and accumulates value they can reach.
The hard part of life insurance is not the amount. It is choosing between contracts that behave differently.
Term, whole and universal life are the common types, and each has its own way of paying out. Once you know which structure the need calls for, the amount and the premium become a decision rather than a guess.
Term life insurance
- You pay premiums for a set period, and the policy pays out only if you die during that period.
- It suits a need with an end date, and a large amount of coverage on a limited budget.
- Premiums typically increase the older you are when the policy is written.
Whole life insurance
- No set period: you pay premiums for life and the policy pays out when you die.
- It is the most commonly held type, because it provides a savings component alongside the death benefit.
- You may be able to take a lump sum back while you are alive, which reduces the amount paid out later.
Universal life insurance
- Similar to whole life, with more flexibility about taking money out early, including borrowing against the policy and repaying it.
- A loan still outstanding at the time of death can significantly reduce what the policy pays.
The decisions that shape the policy.
- Match the type to how long the need lasts. A need with a defined horizon points at term. A need that does not end, or one where the policy should build value you can reach, points at whole or universal life.
- Set the payout against what it has to replace. The amount you want the policy to pay is one of the factors driving the premium, so it is worth arriving at deliberately rather than working backwards from a premium.
- Expect age and medical history to do most of the pricing. They are the heaviest factors in what you pay, and some policies also require a medical examination to qualify.
Life insurance questions we hear most
What is the actual difference between term and whole life?
Term covers a set period and pays out only if death occurs within it. Whole life has no set period, is paid for over your lifetime, and carries a savings component alongside the death benefit. Term generally buys a larger amount of coverage for a smaller premium.
Will I need a medical examination?
Some policies require one and some do not. Either way, your age and medical history are the heaviest factors in the premium.
How much coverage do I actually need?
Work from what the payout has to replace rather than from a round number. Income the household depends on, a mortgage, and anything else that would still have to be paid are the starting points, and the figure follows from those.
Does the premium change as I get older?
The age at which the policy is written is one of the main things that sets the premium, so the same term coverage generally costs more the later it is bought. Medical history does much of the rest of the pricing.
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Let's put the right policy in place.
Oxford Risk LLC is an independent agency. We represent you rather than a single carrier, which means we can place your coverage with the company whose appetite actually fits your risk. Tell us what you need to protect and an advisor will take it from there.
- Call (330) 315-3081
- Hours Monday - Friday: 8:00 AM - 4:00 PM
- Offices Fairlawn, OH, Cranberry Township, PA, Columbus, OH, Livonia, MI