Different Types of Life Insurance Policies

By Aaron Skloff, AIF, CFA, MBA

There are two basic categories of life insurance, term and permanent. Term may be appropriate if you only need protection for a limited time, such as the life of a mortgage or the time leading up to and the completion of a college education. Permanent may be appropriate if you need lifetime coverage. Let’s look at a variety of the most common types of term and permanent policies.

Traditional Term, Return of Premium Term, Guaranteed Universal Life, Variable Universal Life, Whole Life

Life insurance owned by an Irrevocable Life Insurance Trust (ILIT) still provides for your beneficiaries, while simultaneously removing the policy proceeds (that would normally be included in your estate and possibly subject to federal and state estate taxes) from your estate.

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