Life Insurance

Term insurance provides coverage at a fixed rate of payments for a limited period of time, and is typically the simplest and least expensive life insurance option. It was developed to provide temporary life insurance protection on a limited budget. A Term Life policy can typically be issued for one, three, five, 10, 15 or 20 years. During the “term period” the premiums normally are at a guaranteed level. After the guarantee period, however, the premiums increase dramatically. NEVER buy a term policy without a premium guarantee for less than the length of time you will need the policy. For example: if you want to protect your family by providing sufficient proceeds to cover your mortgage balance in the event of your death, the Term Life period should be no less than the number of years left on your mortgage.

Traditional whole life and universal life insurance policies both offer insurance protection for your entire life. The differences lie in the way premiums are paid, how cash value accumulates, and how the death benefit is calculated.

In a traditional whole-life insurance policy, the death benefit, premium payment schedule, and sometimes the interest rate for the accumulation of cash value are determined at the time the insurance contract is written, and are not subject to change.

Universal-life insurance policies are designed to be more flexible, at the cost of the certainty afforded by whole-life insurance. Neither the premium levels nor the death benefit are set in stone. While you are not necessarily required to pay every month, you need to make sure that you are able to pay a minimum amount each year or face having your death benefit dramatically reduced.