Most working adults with families should have some kind of life insurance in place.

There are many different types of coverage, so what are they and how do you know what you need?

Term Life Insurance: This type of policy offers coverage for a specified period of time, or term (10 years, 20 years, etc.). At the end of the term, the policy expires, usually with an option to renew—but likely at a higher rate, as you’ll be older and therefore considered a higher risk. The upside of term coverage is that it’s usually the least expensive, so many clients use it when their insurance needs are higher but cashflow may be tighter (for example, families with young children, or those with a single income). The downside is that term insurance is basically like renting a policy: you have it as long as you pay for it, but unless you die during the term period the policy will expire without ever being used.

Permanent Life Insurance: Unlike term, this type of insurance can accumulate cash value and won’t expire as long as you pay your premiums. You can think of this type of policy as something you own, and it may eventually even be considered an asset. Some permanent policies allow you to borrow from the cash value, or trade the policy in altogether for cash back. For these reasons, it’s generally more expensive, although there are some options that can make permanent insurance more affordable.

At different points in our lives, different types of coverage make sense. Are you adequately covered for this stage of life? If you’re not sure, let’s connect. You may reach me by phone at (804) 665-1589 or e-mail to kmurphy@capfs.com.