Life insurance comes in two types; Term and Permanent. Term is always called Term, but Permanent has many names such as Universal Life, Indexed Universal Life, Variable Universal Life, Whole Life and more.
The “Term” in term life refers to the number of years the premiums are locked in. At the end of the policy’s initial term, the premiums go up every year thereafter to age 100.
Term is a great value for young families. The coverage is high and the premiums are low, especially on a 10-year policy. But if you’re not careful you could “term out” and be forced to shop for a new policy. For example, a 25-year old purchases a 20-year term policy, but at age 45 finds they still need life insurance. The annual premium increases will be substantial. That is not where you want to find yourself, especially if your health has declined. You will pay higher than normal rates in a new policy, or may even be uninsurable. In which case you will keep your expensive 20-year term policy because you have no other option.
When utilizing term insurance, make sure you choose wisely so you won’t “term out” while your family still needs the protection. Make sure the kids are grown and you and your spouse have enough savings before the end of the term. When in doubt, choose a 30-year term and sleep easy at night knowing you won’t have to do this again.
What is a good amount of life insurance? You may choose to purchase enough coverage to replace the person’s income, or to pay down major debts such as cars and mortgages, or to fund a child’s education. Or you may choose to do all of that.
But make no mistake. Some life insurance is better than no insurance. Whatever amount you decide is up to you. We have the same rates as all life insurance websites. We’ll show you rates for every insurance company so you know you’re getting the best deal. If you find a rate you like, simply click APPLY and we’ll take care of the rest.
For people in their late 40’s and beyond we recommend Permanent Insurance. A permanent policy taken out at age 48 and structured to age 100 will act much like a term policy because the premiums will be level like term insurance, but for the rest of your life. The premiums are higher than term for a good reason. The cost of insuring your life rises as you age, so the higher premiums paid in the early years of a permanent policy offset the higher cost of insurance in the later years of your life. You receive equal value in the long run for the premiums paid.
A nice feature of permanent policies is they build up a cash value. If you do not want to keep the policy to age 100, you can surrender it and get cash back. The cash accrues earnings as well. You can even structure a permanent policy to become “paid-up” after a certain time. That means you could pay in for a limited time such as 20 years, and the policy would have enough cash value to then make its own premium payments for the rest of your life.
Permanent insurance policies are customized to your goals, thus they require some fact-finding before we can deliver the proper quotes to you. Simply call or email me and I will be pleased to provide you quotes from carriers that best line up with your insurance goals.