A handful of decisions have great significance over the course of a lifetime: A home, a family, a community. For most people, life insurance falls into that category because it protects a family against a devastating loss of income. But the right policy for you must be one that fits your circumstances. Let us help find what is right for you.
Term and cash value insurance are the two basic types of life insurance.
Term insurance
Term insurance gets its name because it protects you for a specific “term”—usually a year or a limited number of years. Term insurance does not have a cash value and you cannot cash it in. Once the term ends, the policy no longer covers you. Term insurance is well suited to fill a temporary need for increased insurance. If you leave one job for another, you may not have group life insurance coverage through your employer for a short time. Term insurance offers an easy purchase to bridge such a gap. It is also provides you with an option to quickly supplement an existing whole life policy with additional coverage.
Cash value life
For this type of insurance we use part of your premium to set up an account under your policy with a cash value that you may use in a variety of ways. For example:
- You may borrow against a policy’s cash value by taking out a loan. If you don’t pay back the loan and the interest on it, we will subtract the amount you owe from the benefits when you die. If you cancel the policy, we will also subtract the loan balance from the cash value you receive
- You can use the cash value to pay an overdue premium on the policy
- You can use the cash value to increase your income in retirement or to provide for other financial needs. However, to build up this cash value, you must pay higher premiums in the early years of the policy
