More About Term and Universal Insurance

Term Life Insurance

Term life insurance is insurance that you pay for over a specified length of time or "term," such as 1, 10, 15, 20 or 30 years. Term insurance generally offers the greatest amount of coverage for the lowest premium. And the premium is generally fixed for the term of the policy.

With a Term Life insurance plan you can select the death benefit or "face value" to meet your needs. Should you die within the term period, a death benefit is paid to your beneficiaries If you are still living at the end of the term, protection ends unless the policy is renewed. There is no cash value with term insurance.

Who Should Buy Term Insurance?

Term insurance is a good choice when your need for coverage will disappear at some point, such as when your children graduate from college or when a debt is paid off.

Universal Life Insurance

While Term Life insurance provides protection for a specific period of time, Universal Life insurance, a type of permanent life insurance, can provide protection for your entire lifetime.  In addition, Universal Life can build a cash value. In some instances you can borrow against and the accumulated cash value to help meet future goals.

Universal life products give you the flexibility to choose the amount of protection that best suits your family's needs. With a Universal Life policy, you may increase or decrease coverage as your insurance needs change. You may also control the amount and frequency of payments. If you want to increase your premium in the future, the extra dollars grow tax-deferred, and may increase the cash and death benefit values. On the other hand, if you temporarily find yourself in a cash crunch, you can reduce your scheduled premium and let the policy's accumulated cash value pay the remainder of the monthly premium.

Who Should Buy Universal Life Insurance?

People who may need life insurance for a long term should consider buying Universal Life insurance. In addition Universal Life insurance is a good choice for those who may be interested in accumulating a cash value to provide funds for education, retirement or to meet other future goals or who wish to take advantage of the tax-favored treatment of cash value life insurance policies.