Types of Life Insurance

Term Life Insurance is life insurance for a set period of time. If the insured dies during this period, the beneficiary receives a lump sum of tax-free money. Term Insurance is ideal for young families with a limited budget where as much insurance as possible is required to secure the family's well being, or in business situations such as buy-sell agreements, for mortgage coverage, or to fulfill other temporary needs. Permanent (cash value) Insurance provides life-long protection as long as you continue to pay premiums. The premiums are based on your age at the time of purchase, and generally remain level. They do not increase as you age. Therefore, the younger you are when you buy the policy, the lower the premium you will pay for the life of the policy. Because premiums remain level, permanent insurance is more expensive than term insurance. But permanent insurance accumulates cash value, which may be refundable upon surrender of the policy. While the policy is in force, cash values can be borrowed against or used to pay premiums.