Life insurance policies come in a variety of forms that make it easier for applicants to custom fit the right plan for their needs. Some policies build up cash values, some give coverage for your lifetime, while others cover you for a specific number of years. Some policies let you change from one kind of life insurance to another. There are policies that even give you benefits while you are still alive.
Term insurance has lower premiums in the early years and does not build up cash values. Term insurance provides coverage for a number of years. With some term insurance policies, the premium rises each year – while other policies will lock in a level premium for 10, 20 or 30 years. Policies that allow you to lock in the premium for a given number of years will be slightly higher cost in the short run.
The term policy pays a death benefit only if you die during the term chosen.
If high limits of insurance are needed, many times term insurance will allow you to carry high limits at a lower out-of-pocket cost in the beginning. It is important to know what the premium will be as the policy renews, and if you will be able to renew the policy regardless of age or health. Some term policies will allow you to convert to a cash-value policy during a conversion period.
Whichever form your life insurance plan takes, it should be based on your needs and on what you can afford. Many times, especially for young families, the answer may be term insurance.
We would be happy to review your current life insurance plan and help you make a decision if it is adequate or if changes are needed. Give our office a call to set up an appointment to review your life insurance needs and options available to you.