You insure your car and your home to protect what's yours, but ensuring the financial well-being of your legacy is also an important step in preparing for the future. Based on your age, your family situation, and your family's needs and goals, the types of life insurance policies that you need to help secure your future will vary.

Different Types of Life Insurance

Depending on the premium — the amount you pay for the life insurance policy each month — and the length of time you want to be insured, you can sign up for whole life insurance, term life insurance, or both.

Whole Life Insurance:

Whole life insurance is considered a more permanent coverage that pays a benefit upon death of the policyholder while also accumulating cash value over the years. Part of that cash value can be withdrawn or borrowed during the life of the policy. Keep in mind that you will lose your coverage if you surrender the policy for cash, and borrowed funds may require repayment plus interest.

The longer you have whole life insurance, the more value it accrues. And if you have a limited payment whole life policy, you have the insurance protection for life once you’ve made the last required payment. Some whole life insurance policies may not require a health examination based on the results of your initial health questionnaire. Whole life insurance generally has a capped premium, so even when your age or health changes, you pay the same monthly premium for the length of the policy.

While the age limit to qualify for whole life may be capped, depending on the provider, children as young as 15 days old can be signed up for a whole life insurance plan. "We see a lot of grandparents buying whole life insurance for their grandchildren," says Gena Wolbrecht, SVP, Regions Investment Services. "You have to think of it as locking in your coverage."

Term Life Insurance:

Term life insurance is coverage for a certain period of time, such as 10, 20, or 30 years. After that time has passed, the policy can be renewed — potentially at a new rate — or in some cases, rolled into a whole life insurance policy. Term life insurance can often be a more affordable option because it covers only a specific amount of years and does not accumulate value like whole life insurance.

Finding the Right Life Insurance Type

A licensed insurance professional can help you find the right plan or mix of policies depending on your needs to adequately meet the financial demands that may arise.

Though age is a consideration, it’s not the only factor when choosing a life insurance plan. "It’s not about the specific age," says Wolbrecht. "It’s about your individual situation and knowing your individual needs."

For example:

• If you have young dependents, you may want a 30-year term plan for a higher amount to cover expected college expenses, your home mortgage, and income replacement.
• If you’re debt-free and have adult dependents — or no dependents— you might choose a short-term plan with enough to cover final expenses.
• If you’re a parent or grandparent who wants to financially protect your child or grandchild, a whole life insurance plan, which may come with a higher monthly premium, may be a beneficial investment early in life. It will accumulate value over the years and can be supplemented with a term plan as needed.

By asking yourself the right questions about life insurance and working with a licensed insurance professional, you can find the best plan for your situation. Like all long-term financial planning, you should reassess your policies annually, so you can ensure your loved ones are taken care of, no matter what happens. Learn more online and receive a life insurance quote from Regions Investment Services.