Life Insurance

Term Insurance

Term life insurance that is purchased for a specific period of time, usually 10, 15, 20, 25 or 30 years. It pays the amount of the policy to your beneficiary if you die prior to the end of this period. Term life insurance does not build up any cash value or pay any interest. During the term of the policy, the cost for insurance remains level - meaning they do not increase. Typically, at the end of the term, you stop making payments to the insurance company and your coverage ceases. With many term policies, the coverage can be continued but the price will rise steeply every year. Generally, the annual premiums for term insurance will be lower than for any other type of life insurance. The major uses of term insurance are:

• When you are the working spouse in the family, the money from the term policy would be able to provide for your non-working spouse and children if you should die.
• When you want your children to have a college education - and you want to be sure the money will be there even if you are not.
• When certain employees are so vital to your business and their loss would result in a substantial loss of business, key employee coverage would provide the business with funds to recruit and hire new people for those responsibilities.
• When you have a start-up business and a new business loan that will have to be paid even if you are not around to pay it.
• When you have a mortgage or have refinanced your personal residence. Policy proceeds can be used to pay off the loan if you should die.

Permanent Life Insurance

Unlike term life insurance, permanent life insurance is designed to provide insurance protection for a lifetime, at a level premium. Generally, as long as sufficient premiums are paid, it stays in effect. With permanent insurance, you can build cash value, you can increase or decrease the amount of coverage and you can vary the premium payments. You can use this cash surrender value to pay the premiums or to take a loan against the cash value of the policy.