It would seem that something referred to as life insurance would be a fairly simple and straight-forward entity. But since 1981, with the implementation of the Tax Equity and Fiscal Responsibility Law, life insurance became a bit more complicated. The question is often asked which type of life insurance is right for me and my needs? Basically, life insurance comes in two different forms, Term Life and Permanent Life. If you want a policy to last until you die, you’ll need Permanent Life Insurance. If you want a policy to last for a specific period or a specific number of years, choose a Term Life policy.
Term Life Insurance is usually written for people who know how long they need the insurance to last. Perhaps, to pay off a mortgage, fund a college education or pay off consumer debt. Term Insurance is the least expensive way to buy life insurance primarily because the life insurance company knows they will only have to pay a claim if the insured dies within the specific period of time the policy is written for. Term Life Insurance is a good way for many people to get covered by life insurance when they get married, start a family or a buy a home.
Permanent Life Insurance can be for people who want lock to in a monthly rate and ensure their life insurance policy is in force when they die. Most permanent life policies will build a cash account that the insured can access during their life time and most permanent life policies will pay early if the insured is confined to a nursing home or given a terminal diagnosis by their doctor. Permanent life insurance is used for estate planning purposes, fund a charity, or establish an estate fund for their heirs. The best time to buy permanent life insurance is when someone is young because they can lock in low rate for the rest of their lives.
Consulting with a financial advisor can help you with these and other questions regarding the difference between term and permanent life insurance and how they fit into your financial plan. The experts at Advanced Wealth Advisors, LLC provide years of knowledge and experience when consulting with our valued clients with all of their life insurance needs. As qualified investment advisors in Naples and its surrounding areas, our focus is consistently aimed at helping our clients achieve financial freedom.