Having a good life insurance policy in place to protect your property in the event of your death is vital. When you die, your family will have enough to worry about without the added stress of how they are going to hold on to the family home. Your life insurance policy will ensure that this problem is eliminated, with the mortgage balance being paid in full upon your death.

     

Life Insurance: What type is right for me?

Life insurance helps you protect what matters most - your loved ones. Life insurance helps ensure their financial needs are met, even after you're gone. There are two basic types of life insurance: term and permanent. Deciding which type may be appropriate for you depends on how you want your life insurance to work for your family. An agent can help you determine the type and amount of protection you may need. Click here to find an agent.

Mix it up: People often struggle with which type of policy best fits their lifestyle and budget. It may be tempting to go with term insurance because of its low cost, although some argue that despite initial higher premiums, permanent insurance could actually be cheaper and more stable in the long run. Bottom line - both offer advantages to explore. An appealing solution may be a mix of both, which may cover your short and long-term needs in a cost-effective way, potentially avoiding the high costs of buying all your permanent insurance at once.

Combine them: Another approach may be to buy a policy that combines term and permanent life insurance. You lock in lifetime coverage, no matter your health conditions guarding you from prohibitive costs in obtaining a new policy later, or denial of coverage. You may benefit from earned cash value to spend if you choose. The term insurance feature helps provide extra coverage when you need it most, and later you can convert all or part of the term portion of your policy without an additional medical exam.

Term Insurance - The most basic and least expensive type of life insurance. You buy coverage for a certain amount of time, such as 5, 10, 15, 20 or 30 years. If you die before the term is over, your beneficiary gets the benefit stated in your policy. If you live beyond the term, the policy expires.  Many policies also offer the option of extending your coverage, subject to certain restrictions and limitations.

Term Insurance Advantages:
* Fills a temporary need for life insurance protection in your life
* Offers the least expensive insurance protection
* Most policies allow you to convert your term policy into a permanent one
* Can be used as supplemental coverage to a permanent policy
* Death benefits are generally income tax free

Permanent Insurance - This type of policy never expires. As long as premiums are paid, it remains in force. Premiums are usually based on your age at the time of purchase and generally remain level. In addition to providing a death benefit, premiums are also invested to produce returns adding cash value to your policy. You can even tap into this cash value by taking out a loan, withdrawal or surrendering your policy.

Permanent Insurance Advantages:
* Policies offer lifetime protection and can build tax-deferred cash value
* Withdrawals and loans make it easy to access your cash value to help supplement retirement and emergencies
* You can cancel or surrender the policy at any time and use the cash value however you wish
* Offers a guaranteed premium that won't increase
* Death benefits are generally income tax free

To help figure out which is right for you, it may be useful to understand some of the basics of a life insurance policy:

Premium:  The amount you pay in exchange for coverage
Death Benefit:  The amount of money paid to your beneficiaries upon your death
Cash Value:  The amount available to the policyholder through surrenders, loans and withdrawals
Length of coverage:  The amount of time you're insured

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