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All You Ever Wanted to Know About Insurance

Life Insurance 101

Do you know the difference between Term and Whole life insurance? Your most important and valuable asset is your ability to earn income. Make sure you understand the basics about life insurance.

A Term Life policy is issued for a specific term, often 10, 20 or 30 years. It is a great way to protect your family and your assets during your earning years. This is the most cost effective form of life insurance and is most recommended by several personal financial advisors. Term life insurance is like renting a policy – use it or lose it. If you’re alive at the end of the term, the policy expires and you have no coverage, often at an age when purchasing another term policy will be cost prohibitive or not available if health concerns exist.

Whole Life is a form of permanent insurance. That means that it stays in place for a life time, and is the only form of insurance guaranteed to pay out. A whole life policy is more expensive but builds cash throughout the life of the owner. There is death benefit as well as a cash value that can be borrowed from and used to secure financing. A small policy can be used for final expenses and larger policies can serve as a viable tool for estate planning and business succession. Death benefits from Life Insurance are always tax free. There are many financial benefits to having life insurance at the end of life, when your heirs and estate will need it most.

Of course, any life insurance is better than no life insurance and far too many people go without or have policies with inadequate limits. Consult a trusted agent to tailor a policy that best fits your needs.