What type of life insurance policy is right for me?
The answer to this question depends on your circumstances and needs.
You should consider the following:
- Considering your budget, is the premium affordable?
- Are your life insurance needs temporary or permanent?
Examples of permanent needs are:
- Use of death benefit to pay bills or provide money for loved ones
- Use of death benefit to pay final expenses
- Use of death benefit to provide money for a favourite charity
- Use of death benefit to pay estate taxes
- Fund a business buy/sell agreement or provide key person protection
Examples of temporary needs are:
- Use of death benefit to pay educational expenses
- Use of death benefit to pay off home mortgage
- Use of death benefit to pay off an automobile loan
The two major types of life insurance you can choose are:
Here's some information to help you decide which type is better for you:
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There are Two Basic Ways to
Pay for Life Insurance
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 Both Permanent and Term Life Insurance provide a death benefit that is generally federal income tax free. |
 Term Life Insurance: Usually pay increasing premiums over time
 Permanent Life Insurance: Usually pay level premiums over time
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Both types of life insurance have strong points that fit different situations.
The "best" policy for you depends on your objectives and budget.
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Term |
Permanent |
| Premiums paid |
Usually level premiums payable for specified time, premiums increase if policy is renewed |
Usually level premiums payable until insured dies |
| Death benefit* |
Coverage provided for specified time |
Coverage provided until death |
| Overall cost |
May have the lowest premiums in the short term |
May have the lowest premiums in the long term |
| Cash value |
Usually none |
Growth is generally federal income tax deferred |
*As long as premiums are paid when due.
Depending on your needs and budget, you may want to consider a combination of some term insurance and some whole life insurance.
Or if you want flexibility in premium payments and death benefit amounts, you may want to consider universal life insurance, which is a type of permanent insurance.
For help in finding a policy that fits your situation and your budget:
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