Life Insurance

Life Insurance Information

There are many kinds of life insurance, but they generally fall into three categories: term, permanent and cash value life insurance.

Term insurance is designed to meet temporary needs, such as a mortgage or coverage for children until graduation from college. It provides protection for a specific period of time (the "term"), typically 10, 20 or 30 years.  This product has the greatest return of death benefit for premium paid, but it is only paid out during the term of the contract.  It is important to consider product options that offer flexibility to convert to other products after the term ends, if the need for coverage extends beyond the original plan.  There are also new term products that offer extensions on the term and access to a percentage of the death benefit for chronic care.    

Permanent insurance is intended to provide life long protection.  Be aware, unless universal life policies have guarantees, the premium will likely increase in older ages to preserve the policy to last for a lifetime.  With guarantees, up to age 120, as long as you pay the premiums, and no loans, withdrawals or surrenders are taken, the full face amount will be paid.  Because it is designed to last a lifetime, permanent life insurance accumulates cash value but it is important not to use this cash since it is intended to fund the increasing cost of insurance as one ages. 

Cash-value life insurance is intended to grow cash within the policy and be taken out as a loan tax-free.  When these policies are properly funded, they can provide financial flexibility, to provide oneself a loan, fund education, or supplement retirement with tax-free income.   

It's impossible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals.

The best way to figure out the amount and type of life insurance that makes sense for your particular situation is to meet with a qualified and licensed life insurance professional so that you can evaluate your options.

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