There are several variations of life insurance, but they generally fall into two major categories: term insurance and permanent insurance.
Term insurance is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide you only need coverage until your children graduate from college or a particular debt is paid off, such as a mortgage or business loan. Remember though, it is a temporary coverage and should only be a portion of your overall life insurance program. Term insurance should never be viewed as a substitute for permanent life insurance.
In contrast, permanent insurance provides life-long protection. As long as you pay the premiums and no loans or withdrawals are taken, the full face amount will be paid. Designed to last a lifetime, permanent life insurance premiums are understandably higher because coverage never runs out and at some point the death benefit will be paid. Depending on how you structure premiums and benefits, the policy can build appreciable tax-deferred cash value for emergencies, education and supplemental retirement income. Accessing the cash value will effect the death benefit so that needs to be weighed in the decision making process.
Most people have both temporary and permanent life insurance needs and a policy can be blended to achieve various objectives. A policy may also be designed to provide both lump sum benefits and guaranteed monthly income for a specified period. Charitable gifting of life insurance can also be arranged and the premiums are tax deductible. This is a great way to support your church and other non-profit organizations.
The best way to ascertain the amount and plan structure of life insurance that makes sense for you and your family or business situation is for us to meet with you face-to-face. Life insurance is as personal as it gets and we take it seriously. We are qualified seasoned professionals. We'll help you set up a plan that works best for your family, your business and your future. We have access to estate and tax attorneys for the more complicated situations.