Insurance products, rules and tax treatment vary a lot between countries and, in the US, between states. The descriptions below are simplified and general. Whether any cover is suitable depends entirely on your circumstances, so speak to a licensed or authorised professional.
The Main Types, in General Terms
Term life insurance (general concept)
How it generally works: Pays a benefit if the insured person dies during a set term. Usually has no cash value at the end of the term.
Questions to consider:
- What need is the cover meant to meet, and for how long?
- What happens to premiums and cover at the end of the term?
Permanent life insurance (general concept)
How it generally works: Designed to last for life and may build cash value. Usually costs more than term cover for the same benefit.
Questions to consider:
- What are the fees and surrender charges?
- Which parts are guaranteed and which are projections?
Standalone long-term care insurance (general concept)
How it generally works: Helps pay for care if you can no longer manage certain daily activities, under the policy's definitions.
Questions to consider:
- Can premiums rise in future?
- What are the waiting period, benefit limits and definitions of care?
Combination (hybrid) life / long-term care policies (general concept)
How it generally works: Combine life cover with a long-term care benefit in one contract. Terms differ widely by insurer and contract.
Questions to consider:
- What does the contract guarantee (premiums, benefits)?
- How are benefits taxed where you live?
Criteria and Questions to Ask
| Criterion | Why it matters | Question to ask |
|---|---|---|
| Purpose | Cover should match a real need. | What problem am I trying to solve, and are there other ways to solve it? |
| Guarantees | Illustrations are not guarantees. | Which figures are contractually guaranteed? |
| Costs over time | Premiums can change. | Can my premiums increase, and by how much? |
| Definitions & exclusions | Benefits depend on the fine print. | What triggers a claim, and what is excluded? |
| Public support | State provision varies. | What would public programmes (e.g. Medicaid in the US, local authority support in the UK) cover in my situation? |
A Simple Checklist
- Speak to a licensed professional (US: an agent licensed in your state; UK: an FCA-authorised adviser).
- Ask for key facts or policy documents in writing.
- Ask how the adviser is paid.
- Check official consumer guidance: naic.org (US), moneyhelper.org.uk (UK).
Frequently Asked Questions
Does this page recommend a type of policy?
No. It only explains general terms. Suitability depends on your health, finances, family and local rules, which only a licensed professional can assess.
Where can I find neutral consumer information?
In the US, your state insurance department and the NAIC publish consumer guides. In the UK, MoneyHelper offers free, impartial guidance.
- naic.org (US National Association of Insurance Commissioners)
- Your state insurance department (US)
- moneyhelper.org.uk (UK)
- GOV.UK guidance on paying for care
