Terms of Use:

Term Insurance

Advantages

• Initial premiums are generally much lower than those for permanent insurance, allowing you to buy higher levels of coverage at a younger age when the need for protection often is greatest.

• It's good for covering needs that will disappear in time, such as mortgages or car loans.

• You can lock in term rates for a specific period of time, usually between 1 and 20 years.

Disadvantages

• Coverage may terminate at the end of the term or become too expensive to continue.

Permanent Insurance

Advantages

• As long as the premiums are paid, protection is guaranteed for life.

• Premium costs can be fixed or flexible to meet personal financial needs.

• The policy accumulates a cash value against which you can borrow. (Loans must be paid back with interest or your beneficiaries will receive a reduced death benefit.) You can borrow against the policy's cash value to pay premiums or use the cash value to provide paid-up insurance.

• The policy's cash value can be surrendered -- in total or in part -- for cash or converted into an annuity. (An annuity is an insurance product that provides an income for a person's lifetime or a specified period.)

• A provision or "rider" can be added to a policy that gives you the option to purchase additional insurance without taking a medical exam or having to furnish evidence of insurability.

Disadvantages

• Generally much more expensive than Term insurance.

• Required premium levels may make it hard to buy enough protection.

• The return on investment is generally much lower than what is possible through alternative investments, but it is a very low risk investment.