Insurance

There are several different types of insurance, but they generally fall into two categories: term and permanent.

Term insurance, as its name implies, is for a short timeframe such as ten or fifteen years. It is designed to meet temporary needs and only pays a benefit if you die during that timeframe. There is no cash accumulation with term insurance and it is pure life coverage in the event of a premature death to cover costs that are likely only going to be around for a short term, i.e. college funding, mortgage, etc. Because it is pure life coverage, the costs associated with term insurance are typically lower than permanent insurance, depending on your age and health status.

Permanent life insurance, on the other hand, is designed to last a full lifetime, to age 100 and beyond. Permanent insurance accumulates internal cash values that can be used at any time for various purposes including retirement income. Forms of permanent life insurance include whole life, universal life and no-lapse guarantee life.