Q&A: Life insurance options

June 4, 2010

Term and whole life are the two basic categories of life insurance, but there are several subcategories within each.

Q: I used to think the only types of life insurance policies were term and whole, but lately I've started hearing about other kinds. What types of policies are available, and how do they differ?

A: Term and whole life are indeed the two basic categories of life insurance, but there are several sub-categories within each of them. These include:

Life insurance policies also can be an estate-planning tool. By having an irrevocable life insurance trust buy an insurance policy, you provide for your beneficiaries while shielding the policy proceeds from taxes.

Send your money management questions to medec@advanstar.com (please include your regular postal address). Answer provided by Aaron Skloff, AIF, CFA, MBA, chief executive officer of the Skloff Financial Group, Berkeley Heights, New Jersey.