Why Purchase Life Insurance?
Life insurance is a popular financial planning tool. The best time to buy life insurance is when you’re in good health. The younger you are and the healthier you are, the better your rates will be. Since the benefits of a life insurance policy are typically paid upon your death, many people regard it as just a way to pay for your funeral and burial. However, it can also be useful to:
- Replace dependents’ income in the event of your death.
- Create an inheritance for your beneficiaries.
- Create a charitable contribution fund.
- Accumulate savings if your policy grows a cash value
- Pay federal or state estate taxes to remove that burden from your heirs.
Types of Life Insurance Policies
There are two types of life insurance – permanent and term.
- A Term life insurance policy pays benefits only if death occurs within the defined term of the policy. You may select a coverage period, typically 1-30 years for a guaranteed premium. Many term life insurance policies offer the option to convert to a permanent (cash value) policy.
- Permanent life insurance is structured to pay benefits for a “lifetime” – even to 121 years of age. There are several types of permanent policies offered by our agency: traditional whole life & universal life.
- With traditional whole life insurance, the death benefit does not change and the premium remains constant for the life of the policy. Over time, the policy accrues a cash value which you may withdraw or borrow.
- A universal life insurance policy is a very flexible long-term protection plan that combines the best features of term and permanent life insurance. It includes life insurance protection with an account value that earns tax-deferred interest. It can also be adjusted to meet your changing needs.