Retirement & Financial Planning Report

When you’re shopping for life insurance, you should choose the right type of policy.


* Term life. These policies pay a specified amount if the insured individual’s death occurs within a certain time period. Premiums may be relatively low. Term life policies often make sense if you have young children and want to protect your family until everyone is living independently.

* Permanent life. These policies may be whole life, universal life, or variable life. In general, premiums are much higher than they are with term life. Some of the excess you pay goes into an account known as the cash value.

The cash value can grow, tax-free. As you get older, and the cost of term life insurance increases, money from the cash value can keep the policy in force. As the name suggests, a permanent life policy may be your best choice if you want a life insurance policy that will pay off, no matter when you die.

As indicated, permanent life policies generally will have higher premiums than term life. However, buying such a policy when you are relatively young and healthy can hold down the cost.