Life insurance 101: A step-by-step guide

If you’re like many people, you may think that life insurance is too complicated or too expensive. But finding a policy that meets your needs and budget isn’t difficult—it just requires a little learning.

Understand the basics of life insurance—and your options—with this step-by-step guide.

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Understanding life insurance

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In exchange for the death benefit, life insurance products charge fees such as mortality and expense risk charges and surrender fees.

Withdrawals and policy loans may decrease the amount of death benefit and cash value. Surrender charges and other policy charges may apply to distributions taken from the policy. If the life insurance policy is a Modified Endowment Contract (MEC), distributions may be subject to income taxes.

Investing in variable universal life insurance involves risk, including possible loss of principal.

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.