The subject of life insurance can be a confusing one and we spend a lot of time discussing various ways to buy life insurance. How much do I need? How much will it cost? Will my beneficiaries have enogh to live comfortably? What is the difference between cash-value and term life insurance? Which is the cheapest to buy?
CASH VALUE LIFE INSURANCE POLICIES
Cash value life insurance, such as universal and whole life, combine a death benefit and a tax deferred saving element. Occasionally referred to as permanent life insurance, these types of policies are intended to cover you for your lifetime.
Annual premiums for cash value policies generally are higher than those of term life policies as part of each premium pays for insurance and the remainder is invested. Cash value is what you can borrow from the policy or receive by surrendering it. These funds are ideal for retirement planning and college funding, among other goals, because they accumulate tax deferred until you withdraw them and then may be partially taxable. Loans and withdrawals will reduce the policies cash value and death benefit.
LIFE INSURANCE MADE EASY
Term life insurance is the...
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