Life Insurance and Annuities

There are many reasons for purchasing life insurance, among which are the following: • Insurance to provide financial protection and security for surviving family members upon the death of the insured person. • Insurance to cover a particular need such as paying off a mortgage or other debt upon the insured’s death. • Business insurance to compensate a company on the death of a key employee or to provide a surviving partner the resources to buy out the deceased partner’s share of the business. • Insurance to provide funds to pay estate taxes or other final obligations necessary to settle a deceased person’s estate. • Insurance to provide the funds necessary for the deceased person’s burial expenses. Choosing the Appropriate Type of Life Insurance There are two basic types of life insurance: Term Life Insurance and Cash Value Life Insurance. There are many policy variations between these two types of life insurance. Term Policies provide life insurance for a specified period of time. This period could be as short as one year or provide coverage for a specific number of years such as 5, 10, 20 years or to a specified age. If you die during the term period, the company will pay the face value to your beneficiary. If you live beyond the term period you had selected, no benefit is payable. As a rule, term policies offer a death benefit with no savings element or cash value. If you have a limited amount to spend, and only need insurance for a specified period of time, you may be able to get more coverage by buying term insurance than by buying cash value insurance. Keep in mind that the cost 5