Saving You Money For Life

I’ve given the long version of this topic many times. Here’s a quick snapshot of things to consider:

1. Length of Time – Term life insurance ceases at the end of a specified period – typically 10, 20 or 30 years. Permanent continues until age 100 or later so long as premiums are paid.

2. Premiums – Term life premiums are much lower than permanent insurance. Permanent premiums are often 3-5 times higher than that of term.

3. Cash Surrender value – With term life insurance policies, there is no cash surrender value. Where as with permanent policies accumulate cash surrender value or loan value on a tax-deferred basis.

4. Key Advantage – Term policies offer the highest death benefit for the lowest cost.  Permanent policies offer lifelong protection and tax-deferred savings.

5. Key Disadvantage – With term life insurance, there are many factors including age, health status, etc.) that can make it too expensive to continue coverage after the term expires, unless you buy a policy with a convertibility option.  Permanent policies have initially larger premiums which make it difficult to buy the amount of protection really needed.

You can leave a response, or trackback from your own site.