Published by Trustmark Voluntary Benefits on July 16th, 2021

Life insurance can be an intimidating topic, especially if you have a new family and increasing responsibilities. How much coverage do you need? What’s the right type of policy for you and your family? When it comes to investing in your family’s financial future, you want to feel confident and educated about your coverage…but where to start!? If you fall into this camp, be sure to do some homework on how universal life insurance works, ask your benefits counselor good questions at enrollment, and take a look at this translation guide to start your research off on the right foot.



1. Permanent life insurance

Permanent life insurance policies last for a lifetime or until policy maturation, so long as the premium on the policy is being paid. It offers a death benefit and cash value - the type of permanent policy can affect the premium and cash value amounts. Common types of permanent life insurance are whole, universal, variable and indexed.
 
2. Cash value

With some permanent life insurance, your policy will earn value that you can access called cash value. As this cash value accumulates, it also earns interest. You can make withdrawals, but there are tax implications and other implications for the policy you own. Another route you can take with your policy’s cash value is taking out a loan on it with the intent of paying the value back and, thus, not affecting your policy in the same way as a withdrawal. 

3. Policy maturation

Policy maturation typically occurs at an age, usually fairly late in life, where your policy will either pay you your death benefit or the remaining cash value on your policy. At this point, since you’ve already received a benefit and you’re at a later life stage, you’ll no longer be covered by your policy.
 
​​4. Term life insurance

Term life insurance, unlike permanent life insurance, does have an expiration date. Think of it as renting a life insurance policy rather than owning one. You don’t accumulate any cash value and premiums are based on your age, gender, health status and life expectancy. If you pass away within the specified “term” of the policy, then your beneficiaries receive the guaranteed death benefit. Term life insurance is typically the most affordable option with lower premiums compared to permanent policies.
 
5. Universal life insurance

You’ve probably heard of life insurance, but if you’ve seen the word “universal” in front of it, you may have wondered what it means. Universal life insurance is a permanent life insurance policy with more flexible premiums, but typically slightly less cash value accumulation in comparison to a whole life product. It allows families to have permanent life insurance coverage without the higher premiums of whole life insurance coverage. It also allows you to change the death benefit, and therefore the premium, based on your budget or coverage needs.
 
6. Long-term care

Long-term care is a catch all term generally used to reference services such as home care, adult day care, assisted living and nursing homes. Some life insurance products will offer extra coverage for these to help pay for expenses that aren’t covered by health insurance or Medicaid. With people living longer and the rising costs of care, many people are looking to ease the financial burden for themselves and their families by investing in long-term care insurance. Some life insurance policies also feature long-term care riders to help with affordability.
 
Each of these terms are subjects that you can dive deeper into, but hopefully this quick-hit list gives you a basic understanding of some common life insurance lingo and provides a good launching point for more in-depth research.