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Life Insurance

Usually people buy life insurance to protect their heirs against economic loss. Proceeds from life insurance allow survivors to maintain an acceptable standard of living. These funds can be used to pay off their mortgage, provide a monthly income, or guarantee their children will have the education they need to compete in the job market.

Life insurance can be especially important if the surviving spouse works part-time or is a stay-at-home parent. If you are single and plan to marry in the future, you should consider purchasing life insurance to protect your future insurability, e.g. the right to buy life insurance in the future despite your health. 

Term Life Insurance

On a tight budget?  You may prefer term life insurance. Term life insurance is considered pure protection because it does not build up a cash value, but provides the most coverage at the least money. Premiums may be guaranteed to remain level for as long as 10, 15, 20, 25 or 30 years. Most term policies can be converted to permanent insurance despite any changes in your health and are renewable to a specific age.

Permanent (Cash Value) Insurance

Permanent life insurance differs from term life insurance in that it has a death benefit and a tax-deferred cash value component. You may borrow or withdraw funds from the cash value for educational expenses, emergencies, etc. Permanent insurance remains in force for the lifetime of the person as long as premiums are paid or if there is enough cash value in the policy to pay your premiums on your behalf. There are several types of permanent life insurance - whole life, universal life, variable life, and variable universal life.