Saving You Money For Life

I believe that doing your homework is important when it comes to shopping, but it’s especially critical to educate yourself when deciding what type of life insurance to buy. It’s not a one size fits all product. Remember, if you make the wrong decision you may end up putting your family’s financial future at risk.

So how does one differentiate between permanent and term life insurance.  Permanent policies have level premiums for life and provide a savings element that builds cash.  A term life insurance policy has no cash value and the premium is paid each year to cover the risk of death that year.

I recommend term life insurance for most cases. Be sure to take the cost, coverage and convertibility into to consideration when identifying which type of life insurance is best for you.

Remember that the premiums for permanent life are usually much higher than term life insurance policies, but they remain constant during the lifetime of the insured.  In addition, keep in mind the fact that you should opt for a policy that has a death benefit large enough to cover the needs of one’s family. If you choose a permanent policy and can’t afford a death benefit equal to at least 10 times your annual salary, then you should opt for term.  The goal of life insurance first and foremost is to replace your income if something should happen to you. If you can’t afford a permanent policy today, opt for a cheap term life insurance policy that allows you the option to convert into a permanent policy at a later date.

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