There are many kinds of life insurance, but they generally fall into two categories: term insurance and permanent insurance.
The most affordable type of insurance when initially purchased and is designed to meet temporary needs. It provides pure protection for a specific period of time (the “term”) and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
By contrast, this one provides lifelong protection. As long as you pay the premiums and no loans, withdrawals, or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time.
It’s impossible to say which type of life insurance is better because the kind of coverage that’s right for you depends on your unique circumstances and financial goals. Often, a combination of term and permanent insurance is the right solution.
But remember, the best way to figure out the amount and type of life insurance that makes sense for your particular situation is to give us a call to assess your actual needs.