Often overlooked, life insurance is one of the key components in financial planning and building generational wealth. Many people consider it something they’ll get around to which unfortunately can be too late. With all of the options and variables it can be very confusing, but that’s why we’re here. Let us help get secured with one of the keys to generational wealth.
TYPES OF LIFE INSURANCE
Term insurance provides protection for a specific period of time/term. It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of the term, which can be from one to 20 years or to a specific age i.e. age 65. Like all life insurance, it pays a cash benefit to your beneficiary, tax-free. Initially it is the most affordable insurance but the cost will increase as you age at each renewal date.
Permanent insurance provides lifelong protection. As long as you pay the premiums, the death benefit will be paid. These policies are designed and priced for you to keep over a long period of time. This type of insurance is ideal for Estate and Legacy planning. If you don’t intend to keep the policy for the long term, this may be the wrong type of insurance for you. Most also have a feature known as cash value or cash-surrender value. This feature, not found in most term insurance policies and provides you with some options such as borrowing against it.
Universal life insurance is a option between the two. It provides a tax-free death benefit plus the option to invest and earn tax-deferred interest. This policy also accumlates a cash-value against which you can borrow.
How much insurance do you need? This is different for everyone as it depends on your life circumstances, priorities and obligations. Contact us for a free, no obligation Needs Analysis.
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