What Type Is Right for Me?
Life insurance helps you protect what matters most - your loved ones. Life insurance helps ensure their financial needs are met, even after you’re gone. There are two basic types of life insurance: term and permanent. Deciding which type may be appropriate for you depends on how you want your life insurance to work for your family. An Agent can help you determine the type and amount of protection you may need.
To help figure out which is right for you, it may be useful to understand some of the basics of a life insurance policy:
- The amount you pay in exchange for coverage
- The amount of money paid to your beneficiaries upon your death
- The amount available to the policyholder through surrenders, loans and withdrawals
- The amount of time you’re insured
|Life Insurance: What Type Is Right For Me? |
|Term Insurance Advantages
|| Permanent Insurance Advantages|
|Fills a temporary need for life insurance
protection in your life
|Policies offer lifetime protection and can|
build tax-deferred cash value
|Offers the least expensive insurance
|Withdrawals and loans make it easy to|
access your cash value to help supplement
retirement and emergencies
|Most policies allow you to convert your
term policy into a permanent one
|You can cancel or surrender the policy at|
any time and use the cash value however
|Can be used as supplemental coverage
to a permanent policy
|Offers a guaranteed premium that won’t|
|Death benefits are generally income
|Death benefits are generally income tax free|
Mix It Up
People often struggle with which type of policy best fits their lifestyle and budget. It may be tempting to go with term insurance because of its low cost, although some argue that despite initial higher premiums, permanent insurance could actually be cheaper and more stable in the long run. Bottom line - both offer advantages to explore. An appealing solution may be a mix of both, which may cover your short and long-term needs in a cost-effective way, potentially avoiding the high costs of buying all your permanent insurance at once.
Another approach may be to buy a policy that combines term and permanent life insurance. You lock in lifetime coverage, no matter your health conditions - guarding you from prohibitive costs in obtaining a new policy later, or denial of coverage. You may benefit from earned cash value to spend if you choose. The term insurance feature helps provide extra coverage when you need it most, and later you can convert all or part of the term portion of your policy without an additional medical exam.
Boost Your Term Policy with Riders
Many term life policies offer extra features called riders for an additional cost.