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Term or Permanent Life Insurance?

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term or permanentIt’s clear that purchasing life insurance is a good idea, but many people aren’t really sure whether they need term or permanent life insurance. To make a little bit easier for you to choose the best option for you, we will give you some basic information on both life insurance types.Term life insurance policies provide a level-death benefit and level premium protection for a stater time period, such as 10, 15 or 20 years. Permanent insurance commonly provides both cash savings and a death benefit. Nevertheless, permanent life insurance has two different types: whole life and universal life. The initial premium for term insurance is lower than for permanent insurance, if a death benefit was comparable.

Term insurance may be a good fit for younger families and individuals who need protection against the loss of primary earner’s income for a stated period of time. Commonly, it requires a medical examination. One of the benefits of term life insurances is that this type is a rather simple product, so it’s quite easy to compare different offers and to shop for it. The market for selling term life insurance is very competitive and it presents good values for clients. Nevertheless, term insurance doesn’t build cash value, so the policy doesn’t have a value at the end of the term, if not used in the meantime.

Permanent life insurance provides protection for client’s entire life. In case a guaranteed level premium is something you find important, make sure the policy you bought provides for one. One of the greatest benefits of permanent insurance is the fact that it accumulates a cash value and policy owners are able to borrow against it tax-free or to use that cash for education, retirement and other goals. On the downside, premiums are usually higher than for term insurance.

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