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Life insurance is a very important part of your insurance portfolio.  Most people immediately think of insuring their home and car because they believe these are their biggest assets.  However, your biggest asset is you!  You and your ability to earn an income is the greatest asset your family has.  Without, you buying a house or car, paying for school, taking vacations, etc. cannot happen.  What happens to your family if the unfortunate happens and you are no longer able to provide for them?

You purchase life insurance to protect your family from your untimely passing, but what is the best insurance for you and your family?  There are two general categories of insurance: Term and Permanent.  Let’s take a look at these and see what might be the best fit for your family.

Term Life Insurance provides temporary protection, typically for a period of 5-30 years.  At the end of the term, the coverage ends unless you elect to renew the insurance according to the conditions of your policy.  Term is the least expensive life insurance coverage but, as with Home and Auto Insurance, unless you have a claim (death with life insurance), there is no cash value and nothing pays out.  If renewed, the premiums will increase due to your increase in age.

Permanent Life Insurance comes in a number of different forms but all have some common characteristics.  Permanent insurance is called permanent because it is designed to last your entire life (or to age 120 when most policies “mature” or end).  The premiums are higher because a portion of the premium you pay goes into a cash value account that grows throughout the life of your policy tax free.  This cash value can be borrowed against, used for qualified emergencies or used to supplement your retirement.  If done carefully, this can be done with few or no tax consequences.

So what is the best option for you and your family?  It depends on your situation.  Who and what are you protecting and for how long?  If you are looking to have life insurance until your kids leave the house, graduate college or for the length of you mortgage, term insurance might be the best fit for you.  Are you interested in having life insurance, while saving for retirement or providing cash to help your family when you pass away at a ripe old age?  Permanent insurance is a better fit for helping you with these goals.  Permanent Life Insurance is also great for children as it guarantees their ability to have insurance in the future by securing it for them now when they are more able to obtain insurance, the insurance is less expensive and can provide them a cash benefit down the road if they need it.

In the end, life insurance needs vary on the person, their goals and where they are in life.  There is no one right answer.  It’s also important to keep in mind that some life insurance is better than no life insurance if something happens to you!

Contact us at 419-732-3171 today.  The Frederick Agency is here for your life insurance needs!  We will discuss your particular situation and find the best solution for you and your family.  If you want to do some research on your own before contacting us, try http://www.lifehappens.org/.   We also have a number of calculators your may find useful on our website.

Brennan Madison

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