Term life insurance is purchased for a set length of time (a “term”). Ranging from one to 10, 20 and 30 years, term life is a way to get the most coverage for the lowest cost. It has a low initial premium for a specified period of time.
One of the drawbacks is that after the specified term, the cost will increase. This increase is typically determined by the insured persons age at the given time. Also, this type of insurance does not build cash over time, meaning no returns on your paid premiums and no investment or savings options.
Whole life insurance, also known as permanent insurance, is meant to last your entire lifetime (as long as you keep paying the premium, of course) and increases in cash value. The premium remains the same, and the policy guarantees a set death benefit. The policy’s tax deferred cash value can grow each year and can be borrowed to help with emergencies. Just remember, the accumulation of cash value takes time.
Whole life insurance premiums are typically higher compared to term life insurance due to the lifelong coverage and cash value component. It is a great option if you’re seeking a consistent premium payment while guaranteeing financial stability for your loved ones.
Universal life insurance is a flexible form of permanent coverage that can last your lifetime and can also increase in cash value over time. Flexibility means that you can change policy aspects – the size of the premiums, whether the death benefit increases or stays level – which allows your coverage to change as your needs change.
Universal life has the ability to increase in cash value, depending on how it is funded. The cash value account earns interest and the taxes are deferred. With so many coverage options, universal life insurance can easily be included in a budget of any size.
To learn more about your life insurance options, get in touch with a Hardin Valley Farm Bureau Insurance agent or get a quote by visiting Farm Bureau Insurance of Tennessee online.
Hardin Valley Farm Bureau Insurance
10851 Hardin Valley Road
Knoxville, TN 37932
865.247.6517
fbiTN.com