Broker Check

Beyond Term Insurance

| September 27, 2017
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Term insurance is typically purchased to protect a growing family from the catastrophic loss of its primary “breadwinner.” Lower initial premiums offer the flexibility to fit immediate needs. However, over time, a more permanent and valuable life insurance contract may be needed to provide security and more stable premium payments for the future. 

The low cost/high benefit of term insurance is its most attractive feature. Typically, however, term insurance premiums continue to rise with age. Some term contracts do offer premiums that remain level for a pre-determined number of years, but these contracts will experience significant premium increases in the future, or death benefits that decrease yearly. A policy that has long-term value and benefits and the flexibility to help cope with change is important. Therefore, converting a term policy to permanent insurance may make sense.  

A Permanent Solution 

Converting your term policy to a permanent insurance contract can be important to your overall financial strategy. Like term insurance, permanent insurance provides a guaranteed death benefit. There are also some other appealing benefits, among them: 

  • Premiums will remain level for the life of your policy. 
  • A portion of your premiums accumulate tax deferred (cash value) and can be borrowed at favorable rates or withdrawn at any time. 
  • You can use the policy’s underlying cash values to help supplement retirement, college funding, or other future cash needs. 

Converting your term insurance to a permanent contract may help provide maximum security and protection. You will be comfortable knowing your family will be provided for in the event of your untimely death. In addition, you will also feel a great sense of confidence knowing your premiums are working hard at building tax-deferred cash values that may be important in the years to come. While this approach may not be for everyone, it is always wise to review your insurance options with your insurance professional to help ensure you have the proper coverage to meet your particular needs.

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