Life Insurance Education

The right protection

Which is right for you? Most families need life insurance to protect their standard of living, but choosing the right plan to fit your needs can be a challenge.
Term Life Insurance: provides a benefit when the insured dies while the policy is still in force.

Cash Value life Insurance: often combines a death benefit with an investment program managed by the insurance company.

How much do you need?

Although everyone’s situation is unique, many experts recommend purchasing life insurance coverage equal to 5-10 times your gross income. Be sure to also consider the assets you own and your debt load when deciding how much coverage to buy.

Make the right choice for your family

Purchasing life insurance is an important decision. However you decided to protect your family, make sure you get the right coverage from a company you can count on. Do you understand the differences between term and cash value insurance?


Cash Value Life Insurance Buy Term & Invest the Difference
Life Insurance and investments are bundled Life Insurance and Investments are separate
together

Higher initial premium for same coverage Lower initial premium for same coverage

Purchasing the needed coverage for your Can purchase more coverage to protect family
Family can be cost prohibitive because term life insurance is generally more affordable

Sometimes yields a lower rate of return on Market rate of return on investment (10% average)
Investment portion. For example: a traditional
whole policy might yield an average rate of
return generally less than 5% per year.

Borrowing from your policy reduces the face Withdrawing money from your investments has no
amount available at death. If you borrow too effect on your term life insurance face amount because
much money, it may cause the policy to lapse, your investments are separate. Taxes are usually due on
at which time you would owe taxes on the gains the gain if your investment.
that are part of the loan.

Investing in a case value policy is not the same You can invest your savings in a retirement plan (401K)
as investing in a retirement plan such as an IRA that may have a tax advantages.
Or 401K account.

Designed so that upon death, you receive your Upon death, your family receives the face amount of
face amount of coverage, but not your face of your term insurance plus your investments.
amount plus your cash value, in most cases.