Life insurance is a crucial step in planning for your future and the future of your loved ones. It can fulfill promises made to your family if you are no longer around by providing a death benefit to your beneficiaries in return for premiums paid to the insurance company. Life insurance can also provide benefits while you are living.

Term Insurance

Term insurance can give you protection for mortgages, income replacement, credit card debt, and educational expenses. This insurance is the most cost-effective way to cover costs for loved ones left behind. Term insurance is designed to meet temporary needs. It provides protection for a specific period of time (the “term”) and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage. There are a variety of level term guaranteed premium plans ranging from 5, 10, 15, 20 or 30 years.

Permanent Life Insurance

This life policy will last for your entire life.  Permanent insurance provides lifelong protection. As long as you pay the premiums, and no loans, withdrawals or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time. Unlike term, permanent life insurance builds a cash value that increases the longer the policy is in force. Permanent needs may include final expenses and funds to cover estate taxes and retirement savings protection. Whole life and universal life plans are ideally suited for meeting these goals.

It’s impossible to say which type of life insurance is better because the kind of coverage that’s right for you depends on your unique circumstances and financial goals.

But remember, the best way to figure out the amount and type of life insurance that makes sense for your particular situation is to meet with a qualified and licensed life insurance professional.