Life Insurance

There are many different reasons that a person would obtain life insurance, and those reasons will dictate which type of life insurance they will purchase.  Some of the reasons that people obtain life insurance are purely financial and others are more emotional than anything.  Financial reasons for maintaining life insurance range from covering estate taxes and passing on wealth, to supplementing investment accounts, guaranteeing an income after retirement, or protecting a business from the impact of a sudden loss of a key employee or executive.  The emotional reasons that a person will buy life insurance usually pertain to their family and the security of their family’s future, should they die suddenly.  If a household contributor is suddenly deceased, things like paying the mortgage or putting the kids through college often become extremely difficult to do.

• Term Life Insurance is the type of life insurance that will maximize coverage amount for the premium paid.  However, the benefit may only be paid if the death of the insured occurs within the specified period, usually 10, 15,20 or 30 years.  Most term policies will have a level premium for the entire policy period, and many will also allow a person to add benefits for a spouse, children, or even income if a disability occurs.
• Permanent Life Insurance is life insurance that typically has a level premium and will last until death or age 110, as long as the premium is paid.  It is naturally more expensive than term because not only can it be kept for life, but It also builds cash value that can be borrowed against or withdrawn entirely.