What type of life insurance is right for you?

The differences between term life insurance and permanent life insurance

Life insurance helps you to save for the future and protect the financial security of your family, but which type of life insurance is best for your current financial circumstances and the needs of your family.

“The wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today,” according to Ginger Applegarth from MSN Money. This is why it’s especially important to carefully decide which type of life insurance you purchase.

Term Life Insurance

Term life insurance provides coverage for a certain number of years. If the policyholder dies during this time period, the plan pays out a death benefit. The plan benefits are limited to its death benefit, so if you live longer than the policy length, there is no payout.

“Term insurance can be a good fit for younger individuals and families, who need protection against the loss of income of a primary earner for a stated period of time, at an affordable cost,” according to Daniel Solin from the U.S. News. “For many consumers, the only way they can afford the coverage they need, for the time when they need it, is through term life insurance.”

Permanent Life Insurance

A permanent life policy combines death benefits with what is known as a “cash value.” Because the part of the premium that is placed into the cash value continues to grow due to earned interest or dividends, the older a policy gets, the more it’s worth. Because permanent life policies include cash value, they’re more expensive than term life plans with comparable death benefits.

“According to independent insurance consultant Glenn Daily, permanent insurance can make sense for consumers who need to create liquidity in order to pay projected federal estate taxes,” states Solin. “He also recommends permanent insurance to those concerned about asset protection, where state law provides that the cash value and death benefits of insurance policies are not subject to claims by creditors.”

Deciding what life insurance policy to go with is a big decision. Be sure that you’re getting the right information by speaking with a professional. Call us today at 817-390-2350 or toll free at 1-888-227-5119 or get a quote online.

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