Get the facts on life insurance. We help you understand the life insurance types, riders, costs, policies, and more using life insurance facts and stats.

  • About 41% of adults in the US don’t have life insurance and today adults are less likely to have life insurance than they were in the past. Before we get to more statistics on life insurance, let’s look at the facts on what it is and how it works.
  • Term life insurance covers you for a specific period of time, typically 1 – 30 years. It pays out in death benefits.
  • Whole life is sometimes called permanent life insurance, it covers you to death or old age. It pays out in two ways death benefits and cash value.
  • Death benefits are a fixed payment, based on your contract, that pay out if death occurs during the term of the contract.
  • Cash value is money built up in a savings account attached to permanent life policies.
  • Term life insurance and whole life insurance both include a number of different riders that can affect the costs and coverage of a policy. Given the sheer amount of riders it’s important to only choose the ones you need to keep premiums low.
  • A convertible life insurance policy is typically a term policy with a convertible rider that allows you to¬†convert term life into whole life without taking an evidence of insurability test.
  • Evidence of insurability is the screening test used by life insurers to get a premium.
  • Term life insurance only has one main type (term), whole life on the other hand has a number of different subtypes that differ mainly by how the policy can be adjusted and how the savings portion works.
  • Variable whole life insurance allows the policy holder¬†to invest in more risky stock and/or bond markets. In other words the investments “vary”. This is a more risky form of whole life.
  • Universal whole life insurance allows the policy holder to adjust premium amounts over time and adjust benefits.
  • There are also subtypes of variable and universal life insurance. These include variable universal where a policy holder can both adjust benefits and vary investments and indexed universal which gives even more flexibility in terms of how money is invested, but typically includes more management fees and more risks to the insured.
  • The way in which premiums are paid varies between life insurance types. Some policies let you pay up front, others ramp up or down depending upon a number of factors. It’s important to think about how you will pay for your policy in the best and worst of times.
  • Some life insurance policies will let you borrow against cash value to pay premiums, but you’ll typically have to pay back that “loan” with interest.
  • There are a number of ways to lose your life insurance policy. They include not paying, over-borrowing, early withdrawal, not adhering to terms of the contract, or losing money in investments.