Let’s review some the basics on life insurance so you can decide what is best for you and your family.

T-100 Insurance:

This is the cheapest and most basic version of the whole life policy products.  This product offers no cash value or dividends, and you continue to pay the premiums until you reach 100 years old.  The product is based on a regular payment structure and simply pays out the value of the policy upon death.

Term Insurance:

Term insurance is an insurance policy for a guaranteed amount and a set term.  It is the cheapest of all insurance policy and is only valid for the term you choose.  So, if you take out a term of ten years and do not renew it, then die in the eleventh year, you receive nothing.  There are three types of term policies:

1. Level term: no increase in premiums.
2. Increasing term: premiums increase over time.
3. Decreasing term: premiums remain the same on a decreasing policy per year.

Whole Life (Participating) Insurance:

Whole life insurance is available in two types of payment structures.  You can have premiums that are paid until your death or premiums paid for a specified period of time or age, such as twenty years or until you turn 60.  Whatever method you chose, the coverage is lifelong and permanent.

Universal Life Insurance:

This type of permanent insurance can be an excellent tool for tax and estate planning.  It provides for a structured insurance benefit with an investment account that you can personally control.  Like whole life insurance, a universal policy has a cash account value that can grow without restrictions based on the return on your investments.  This policy is also among the most flexible and ultimately has the most risk.  You are responsible for the investment decisions in the policy; if the plan performs well, you might be able to stop making your premiums and take out the surplus in your cash account.  Conversely, if the investment goes down, you could find yourself reducing the death benefit or making up for the losses from your personal savings.

Christine’s Tip:

Insurance decisions, financial goals and personal needs should always be revisited every five years so that you keep your budget tight, lean and on track at all times – with the goal to protect your family should something unexpected happen.