 | Chris Senecaut is a Financial Representative for Modern Woodmen Fraternal Financial. As a company they will be lowering their rates effective December 27, 2011. All transfers must be made by that date to get their 3% guarantee and we will still have their guaranteed return of principal. Chris looks forward to helping you get through this economic downturn and prosper in the future. If you would like to learn more please call 620-724-0833. |
Banking & Finance
2011-07-01 10:51:00
Term vs. permanent life insurance
Question: How can I financially protect my family when dealing with a loss due to death?
Answer: If you want to protect your family against the financial consequences associated with death, both term life insurance and permanent life insurance can meet your goal. But the two life insurance products are very different. With term life insurance you purchase life insurance for a specified number of years. At the end of that time period, your life insurance coverage ends. Often, term life insurance is less expensive to obtain than permanent life insurance. However, each time you renew a term life insurance contract, your premiums will probably increase. Premiums for term life insurance are based on your attained age at renewal. Many people choose term life insurance when they need death benefit protection but are unable to pay the higher premiums of permanent life insurance. Later, when they can afford it, they convert their term life insurance to permanent life insurance. Term life insurance also helps you provide money if you die while still owing for a mortgage, car loan or other major debt.
If you’re looking for death benefit protection for your entire life, permanent life insurance can be the better choice. As long as you pay the premiums, the death benefit will always be there. And premiums for permanent life insurance usually remain the same throughout the life of the contract. Most permanent life insurance plans offer a cash value in addition to the death benefit. The cash value is a sum in the contract that usually increases through the years on a tax-deferred basis under current tax laws. Some people borrow against the cash value to help pay for unexpected emergencies or college expenses, or to help supplement their retirement income.
