Term or Permanent?

Term life insurance provides death protection for a stated time period, or term.

Term life insurance is perhaps the simplest form of life insurance. It was developed to provide temporary life insurance protection on a limited budget. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals such as life insurance coverage to pay off a loan, or providing extra life insurance protection during the child-raising years.

Features of Term Life Insurance

Adjustable premiums: Term life insurance policies have adjustable premiums. This means that your premium may be raised or lowered at some point, which is specified in the policy based on projected changes of investment earnings, mortality experience, persistency, and expenses. However, premiums may never be raised above the maximum premiums stated in the policy.

Renewability: Term policies allow the policyholder to continue coverage past the original coverage period of the policy. Each time the policy is renewed the premium increases to the amount for the then attained age of the insured. This right is usually offered for a specific period, which varies depending on the type of policy.

Conversion: Term policies are convertible to age 75 in most states. Conversion allows the policyholder to exchange a term life insurance policy for any permanent life insurance policy offered by the Company at any time while the policy is in force (subject to established policy minimums).

Permanent life insurance coverage for as long as you live and continue to make timely premium payments.

Features of Whole Life Insurance

Premiums generally are level and payable for life: Since premiums are level, the younger you are when you purchase a whole life policy, the less expensive the annual premiums will be.You may want a whole life policy that provides shorter premium payment periods, such as 15 years or a one-time payment.

Dividends: Whole life insurance policies can earn dividends. Dividends result when our actual life insurance costs turn out to be less than we assumed in setting our premiums. When this happens, your insurance company may return a portion of your life insurance premium to you as a dividend. Dividends are not guaranteed, since we don't know our actual costs in advance.

Guaranteed Cash Values: Unlike term life insurance, which does not accumulate any cash values, some of the money you pay into your whole life policy accumulates as guaranteed cash values. If you choose to surrender the policy, these guaranteed cash values would be available to you. Or, as long as the policy is in force, you may borrow against them as a policy loan at the current policy loan interest rate.

The amount of your guaranteed cash value depends on the kind of whole life policy you have, its size and how long you have had it. The growth in cash values is tax deferred under current federal income tax law. Borrowed amounts reduce the death benefit and cash surrender value.