How do I know which life insurance is best for me?
When buying life insurance, you have the option of purchasing term insurance or permanent insurance. Before choosing which product is right for you, it is important to understand the fundamental difference between the two.

Renting vs. buying
The difference between term insurance and permanent insurance is similar to the difference between renting and buying a home. With term insurance, you pay for protection for a specific period of time. Like renting, you may pay less per month, but you’re not gaining any equity. And term coverage expires at the end of the term period, with no cash value. Permanent life insurance is a lot like buying a home. With each payment, you’re accumulating cash value (equity) that can be used as collateral for a loan to fund a child’s college education, a vacation home, or a medical emergency. And as long as you meet the policy’s terms and conditions, you’re covered for life.

Whole vs. Universal
First, you need to choose between term or permanent insurance. If you choose permanent, you have a couple of choices. Whole life insurance offers fixed premiums and a fixed benefit throughout the life of the policy. The cash value for a whole life policy is guaranteed. Universal is more flexible – it allows the owner to adjust the coverage amount and/or premium payments, within limits, to meet the needs of the individual’s situation. Because the interest rates you earn are also flexible – they can rise or fall, depending on the performance of the company – your risk is greater, as is the potential reward. However, universal life policies guarantee a minimum interest rate.

Why buy permanent life insurance?
Cash value accumulation Permanent life insurance buys more than peace of mind. It accumulates cash value while it protects your family’s way of life. This is the single biggest advantage to permanent life insurance. This advantage provides numerous benefits.
• If you need a loan, you can borrow the money from your insurance company, using the cash value of your policy as collateral. If you need money to finance a child’s college education, a vacation home, or a medical emergency, you have an option that’s not dependent on credit checks or other restrictions.
• If a situation occurs that makes it impossible to pay your premiums, you can use the policy’s cash value to keep the policy in effect.
• Your cash accumulation gains grow tax deferred.

How much insurance do I need?
Talk to your agent or advisor about how much life insurance you need and how often you should review your policy. Ideally, you want to provide enough coverage to protect your beneficiaries against financial hardship in the event of your death. This would include:
• Income replacement
• Mortgage, rent, and other debts
• Education-related expenses
• Child care
• Final expenses