Life Insurance Awareness

September is National Life Insurance Awarenessmonth. If you have not thought about life insurance, now is a good time to consider your options. Over the past few months we have received quite a few questions about life insurance policies, and we put together a quick guide to help you make the best decision for your needs.

Essentially, there are two types of life insurance policies available for your family.

1. Term Life Insurance

This life insurance policy is the most popular kind of life insurance.  It is less expensive than permanent, and it is temporary, meaning you can purchase insurance plans for 10, 20 or 30 years.  

If something happens to you, during the term of the policy, it pays out the death benefit. Most term policies have no other benefit provisions. Once the term is over, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the policy to terminate.

2. Permanent/Whole Life Insurance

You will have this policy until you pass away.  Permanent life insurance is more expensive, and is designed for people who have dependents that will require their financial support.

A permanent life insurance policy is not as straight-forward as a term life plan because there is also an investment piece known as a cash-value, which is tax-deferred and grows slowly.

How to know which type of life Insurance is right for your family…

Term Life Insurance is relatively inexpensive, and provides peace-of-mind that if something should happen, your spouse and children would be protected financially.

Most families we work with choose the Term Life Insurance plan because you can obtain large amounts of coverage for reasonably low costs. Also, by the time the term is over, children have moved out of the house, no longer needing financial support (hopefully!) and the spouse can live off retirement savings.

Those who select a Permanent Life Insurance plan typically have family members that will need the financial support, or more complicated wealth planning strategies.  Some families use a permanent life insurance plan as part of their investment plan.

If you don’t have life insurance yet, we are happy to do a quick check for you to see what options are available to you right now.  They will likely be much more reasonably priced than you would expect!