$$$ Back in Your Pocket

Life insurance. Two loaded words that have become the butt of many jokes about salesmen offering ocean-front property in Arizona. Do you really need life insurance? Would a reliable life insurance policy take care of anyone you leave behind in the case of an unexpected death? What if you don’t plan to die any time soon? (Who does?) What if there was a life insurance plan that actually rewards you for NOT dying? Did you know that there is a type of term insurance plan that returns your premium if you are still living after the term of your plan?

There are two basic categories of insurance: term and permanent. The wrong kind can do more damage to your financial plans than good. The most important decision you will make concerning life insurance is whether to buy term, permanent or a combination of both.

Term life policies only make a payment to the beneficiary if the policy holder dies within the term. If you die, the beneficiary wins. If you live past the length of the policy (say, 30 years) then the insurance company keeps the money and you walk away. There’s a new term policy that rewards you for living past the term.  If you’re alive at the end of the term, you get back all the premiums you’ve paid to invest or spend the way you want.

Permanent life policies offer death benefits and a “cash value” savings account, so to speak. That means if you need cash, you can borrow against it. A combination of the two (term and permanent) sometimes is the best decision.

If you’re not sure what kind of coverage you have, you’re in a good place to ask your broker for a policy review.

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