Life insurance is a contract for money that will protect your family and/or specified beneficiary in the event of death. In general, it is an essential component in planning for the future. It is part of building the first building block of financial success.

There are many options with coverage, depending on your situation. And there are three main categories of life insurance: term life, whole life and universal life insurance.

Term life is the simplest and least expensive type of policy. It's pure insurance with no cash value account for a specified term 10 – 20 or 30 years, after which the policy ends or premiums increase dramatically. The death benefit and the policy limit are the same - - a $200,000 policy pays a $200,000 death benefit. The policy protects your family by providing money they can invest to replace your salary, as well as to cover final expenses incurred by your death.

What it does

A term life policy has only one function: to pay a specific lump sum to whoever you've designated, upon a specific event - - your death.

It Has a low annual or monthly cost, compared to cash value policies.

What it doesn’t do

It doesn’t accumulate cash value. You cannot stop payments during the term with out the risk of losing your coverage.

Other types of life insurance provide both a death benefit and a cash value account. Their premiums are larger than term life premiums, because they fund the savings account in addition to buying insurance. These policies are often referred to as cash value policies.

Whole life insurance provides permanent protection for your dependents while building a cash value account. With this type of insurance, the insurance company manages the policies various accounts.

What it does
It pays a death benefit to the beneficiary you name and offers you a low risk cash value account and tax-deferred cash accumulation.

It provides a fixed premium which can't increase during your lifetime as long as you continue to pay the planned amount.

It allows the insurance company to exclusively manage the cash value account in your policy.

It provides you the option to receive dividends from your policy or apply them to reduce payments.

It offers you the right to withdraw from the policy during your lifetime.

What it doesn't do
It doesn't offer the account flexibility to invest in separate accounts such as money market, stock, and bond funds.

It doesn't allow you the account flexibility to split your money among different accounts or to move your money between accounts.

It doesn't offer premium flexibility.

It doesn't offer face amount flexibility.

Universal life insurance provides permanent protection for your dependents and is more flexible than whole or variable life.

What it does
It pays a death benefit to the beneficiary you name and offers you a low risk cash value account and tax deferred accumulation.

It allows you to earn market rates of interest on your cash value account.

It offers the right to borrow or withdraw from the policy during your lifetime.

It allows you premium flexibility.

It offers face amount flexibility.

What it doesn't do
It doesn't offer you the account flexibility to invest in separate accounts such as money market, stock, and bond funds.

It doesn't allow you the account flexibility to split your money among different accounts or to move your money between accounts.

Variable Life and Variable Universal Life are variations on whole life and universal life, allowing the owner to have their cash values exposed to market gains and losses. Please consult with a FINRA registered financial advisor prior to selecting this type of plan to MAKE SURE it is suitable for you.

Each situation is different, schedule a consultation today to see which one is the right solution for your family.