Most of us know that life insurance is used to protect the people we love most. It pays tax free cash when we die.
We can get life insurance through work (some employers offer it through group benefits plans, but this type usually ends when we leave our employer) or we can buy it from an insurance advisor, like a ZLC Associate.
As each of our needs is different from someone else’s, it’s good to start with a basic rule of thumb: If someone relies on us to provide for them, then yes, we probably need life insurance. (Article continues below…)
Term insurance is the simplest type. It is temporary and covers us in case of death during a specified period of time. Like all life insurance, it pays a cash benefit to our beneficiary, tax-free. This type of insurance is most useful when we have a temporary need, such as when we have a mortgage, or small children. It is initially the most affordable insurance but the cost increases as we age.
If we need long-term coverage, such as when we have dependents, tax or estate considerations, permanent insurance may be a better choice. Permanent insurance keeps us covered as long as we live, and over the long term, it can be less expensive than term insurance. We can also add needed health protection and savings programs.