What Type of Life insurance Coverage?

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Term Life Insurance

Life insurance that covers the insured person for a specific period of time and pays a death benefit only if the insured dies during that term. This type of insurance does not build up a cash value. Typical terms available for which the annual premium remains constant are 1, 5, 10, 15 and 20 year.

Pros: Lowest price, simplest
Cons: No savings/cash value component. Premiums will increase with age after the initial guaranteed level term

Whole Life Insurance

Life insurance that provides coverage for an individual's whole life, rather than a specified term. A savings component, called cash value or loan value, builds over time and can be used for wealth accumulation

Pros: Premiums are set and do not increase as one ages. Includes tax deferred savings element
Cons: More expensive than term life insurance. No control over investment allocations

Variable life insurance

A policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder’s discretion.

Pros: Includes tax deferred savings element. Flexibility in investment allocation
Cons: Investment flexibility comes with associated risks. Cannot withdraw cash in your lifetime

How Much Life Insurance Coverage
Do I Need?

While the old rule of thumb that said you should multiply your current salary by 10, it does not address the unique needs of each family. You need to calculate what it would take for your survivors to maintain their current lifestyle - their monthly living expenses - plus what's needed to meet future financial commitments.

Click to estimate your coverage needs