• Supporting Our Clients and the Community During the COVID-19 Pandemic.
    • Skip to primary navigation
    • Skip to main content
    • Skip to primary sidebar
    • Skip to footer
    • Home
    • Our Firm
      • About Our Firm
      • Attorney and Staff Profiles
      • Communities We Serve
        • Bergen County
        • Clifton
        • Essex County
        • Hudson County
        • Hunterdon County
        • Middlesex County
          • Edison
          • Woodbridge
        • Morris County
        • Passaic County
        • Somerset County
          • Hillsborough
          • Warren
        • Sussex County
          • Franklin
        • Union County
          • Plainfield
    • Services
      • Asset & Business Planning
      • Estate And Gift Tax Figures
      • Estate Planning Services
      • Incapacity Planning
      • IRA & Retirement Planning
      • Legacy Planning Services
      • Medicaid and Elder Law
      • SECURE Act
      • Special Needs Planning
      • Trust Administration
    • Seminars
    • Resources
      • Elder Law
        • Elder Law & Medicaid Definitions
        • Elder Law reports
        • Elder Law Resources
          • Plainfield Elder Law
      • Estate Planning
        • Estate Planning Checkup
        • Estate Planning Definitions
        • Incapacity Planning Definitions
        • Is Your Estate Plan Outdated?
        • New Jersey Estate Planning Resources
        • Top 10 Estate and Legacy Planning Techniques
      • Free Estate Planning Worksheet
      • Free Seminars
      • Frequently Asked Questions
        • Business Succession Planning
        • Estate Planning
        • Elder Law
        • Estate Planning for Women
        • Frequently Asked Questions for Families Without an Estate Plan
        • Legacy Wealth Planning
        • LGBTQ Estate Planning
        • Medicaid
        • Trust Administration & Probate
        • Wills and Trusts
      • Newsletters
      • Pre Consultation Form
      • Probate and Trust Administration
        • Bereavement Resources
        • How to Know if You Need Extra Help With Your Grieving
        • Loss of a Loved One
        • Probate Resources
          • Hillsborough Township Probate
          • Plainfield Probate
        • The Mourner’s Bill of Rights
        • Things You Need To Do When a Loved One Passes Away With a Trust
        • Things You Need To Do When a Loved One Passes Away With a Will
        • Trust Administration & Probate Definitions
      • Published Books
    • Reviews
      • Our Reviews
      • Review Us
    • Blog
    • Contact Us

    Augulis Law Firm

    New Jersey Estate Planning Information Center

    Connect with us today(908) 222-8803

    • Attend A Seminar
      • Attend A Webinar
    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    Committed to helping New Jersey families preserve and protect their wealth.
    Home » Estate Planning » What Type of Life Insurance Do I Need?

    What Type of Life Insurance Do I Need?

    May 4, 2021Estate Planning

    South Plainfield estate planning attorneys

    For the vast majority of people, at least one life insurance policy is included in their estate plan. While life insurance can be a valuable estate planning tool, the key to getting the most out of your life insurance policy is knowing which type of insurance is right for you. Toward that end, the estate planning attorney’s at Augulis Law Firm explain how to make the most of your life insurance.

    Understanding Which Type of Life Insurance You Need

    Life insurance is not all the same. The type of policy you need will depend on a variety of factors, including the purpose of the policy, your financial status, and your stage in life. While there are some hybrids and variations of the basic types of life insurance policies available, the basic types include:

    • Term Life Insurance — Term life insurance is usually the simplest and least expensive type of life insurance. A term life insurance policy is purchased for a specific amount of coverage and a specific “term”, or period of time, usually 10 to 30 years. The premiums are usually fixed for the period of the policy. The policy has no cash value and, therefore, cannot be borrowed against. When the insured dies, the policy pays out to the named beneficiary. If the insured outlives the policy, or there is a lapse in premium payments, no benefits are paid. A variation of traditional term life insurance, referred to as “non-level” term, does not remain the same for the life of the policy. Either the premiums increase, or the payout decreases over the life of the policy.
    • Whole Life Insurance – this type of life insurance is purchased in a specific coverage amount for the lifetime of the insured, hence the term “whole life.” Premium payments are usually fixed, meaning they will not change. Along with the insurance benefits, you also get a savings component and will earn dividends from the insurance company. The policy will have a guaranteed cash value. Premiums will be higher than an equivalent amount of term life insurance.
    • Universal Life Insurance – Universal life insurance is also purchased for a specific coverage amount; however, you may have the option to increase the coverage amount later if certain conditions are met. In addition, you may be able to change your premium payment amount if you have accumulated sufficient cash value in the policy. Your policy will usually earn interest at a rate set by the insurance company. Cash value that can often be borrowed against is one benefit to choosing universal life. One disadvantage to universal life is that, unlike whole life, it has a termination age. Although the termination age is usually not until age 95 or 100, if you live that long your loved ones won’t be entitled to any death benefits.
    • Variable Life Insurance – variable life insurance is also another variation of whole life insurance. Variable life truly combines life insurance with investing. Once you accumulate savings, those savings can be invested in stocks, bonds, or mutual funds. You also have premium flexibility with variable life, meaning you can increase or decrease the amount you pay in premiums as long as you have sufficient cash value in the policy to do so. Variable life insurance offers the possibility of greater gains from the investment portion of your premiums, but also the possibility of greater losses.
    • Final Expense Life Insurance – as the name implies, final expense life insurance is a specialized type of life insurance intended to help cover the costs associated with your death. It is only available to people of a certain age and usually terminates at a designated age. This type of life insurance is often used in conjunction with an Irrevocable Life Insurance Trust (ILIT) as part of a funeral planning component within an estate plan.

    Contact an Estate Planning Attorney

    For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about how to make the most of your life insurance, contact an experienced estate planning attorney at Augulis Law Firm by calling 908-222-8803 to schedule your appointment today.

    • Author
    • Recent Posts
    Alan Augulis, Estate Planning Attorney
    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.
    Latest posts by Alan Augulis, Estate Planning Attorney (see all)
    • Important Subjects to Discuss with Your Estate Planning Attorney - January 23, 2023
    • Planning for the Possibility of Dementia - January 20, 2023
    • How to Prepare for Retirement - January 17, 2023

    About Alan Augulis, Estate Planning Attorney

    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

    Primary Sidebar

    Augulis Law Firm

    Free Estate Planning Worksheet

    There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

    • This field is for validation purposes and should be left unchanged.

    Follow Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram

    Testimonials

    Client Review
    August 4, 2020
        

    Very happy with work. Everything explained clearly and concisely and all my questions were answered completely. Process of putting together plan and review of documents was very organized and easy to understand.

    norm

    Blog Subscription

    • This field is for validation purposes and should be left unchanged.

    Where we are

    Augulis Law Firm
    5 Mountain Blvd. Suite 5
    Warren Twp, NJ 07059
    Phone: (908) 222-8803
    Fax: (908) 222-8815

    See Larger Map Get Directions

    Office Hours

    Monday9:00 AM - 5:00 PM
    Tuesday9:00 AM - 5:00 PM
    Wednesday9:00 AM - 5:00 PM
    Thursday9:00 AM - 5:00 PM
    Friday9:00 AM - 5:00 PM

    Map

    map

    Footer

    • Advantages of Working With Our Firm
    • Disclaimer
    • Privacy Policy
    • Sitemap
    • Contact Us

    Connect with Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    footer-logo

    Augulis Law Firm
    All Right Reseved.

    Attorney Advertisement

    © 2023 American Academy of Estate Planning Attorneys, Inc.