What type of Life Insurance Should I buy?

It depends on what your purpose for buying the insurance is. If you want to ensure that your family receives a death benefit regardless of what age you pass away, you should consider purchasing Whole Life Insurance or Universal Life Insurance.

Whole Life is a permanent insurance policy which provides life long protection. With Whole life, you pay a "fixed" premium for the life of the policy. This policy includes a cash value. The cash value is designed to grow and is guaranteed. The interest credited in the policy is tax-deferred. Whole Life policies are generally more expensive than other options available today.

Universal Life is also intended to be a permanent policy, however the interest factors and cash value growth are "assumed" and not guaranteed. With Universal Life, the policy is "designed" to fit the specific needs of the insured, however if the interest and cash value fall short, the policy could require a change in the planned premium or death benefit. Recently, companies began offering "secondary guarantees" to their Universal Life policies, guaranteeing that the death benefit will not change even if the cash value is exhausted.

For individuals looking to insure themselves for a specific length of time such as 30 years, it is wise to look into purchasing a Term Life Insurance policy. This option is sensible for individuals who are looking to make sure that if they were to pass during their working years (up to age 65), their family would not suffer financially. Term Life is usually purchased at a fixed or level premium, meaning that the cost of insurance is spread out over the term chosen and remains the same for the entire life of the policy. If the insured dies during the specified term the beneficiary will receive the full death benefit. If the insured lives longer than the term policy, the insurance ends at the end of the term unless the company offers a renewal option (often at an extremely high price).

Another new feature currently being offered by many companies is Term Insurance with a Return of Premium. In an ROP policy, the insured will be reimbursed the entire base premium paid on the policy if they outlive the specified term. In other words, if an insured purchased a 30 year $500,000 term policy with Return of Premium and paid $1000 a year for 30 years, they would be reimbursed $30,000 if they live past 30 years. If they die within the 30 years, their beneficiary would receive the entire $500,000 death benefit. If you would like a quote for Life Insurance, please contact us directly. We can discuss what type of policy and fits your specific needs and provide quotes from several of the top insurance carriers in the industry. You can contact us by phone during normal business hours at 413-789-3070 or you can e-mail us by clicking here.