Life Insurance
· Term Life
· Whole Life
· Universal Life

The reason for buying life insurance is to protect your family against loss of income. Most experts recommend that you should have between five to ten times your annual gross income. The question is what type of insurance should you chose.

Term Insurance:
Term insurance is relatively cheap, and provides protection against financial loss resulting from death during a specific period of time. This time period can be anywhere from a 1 to 30 year term.

Whole life:
Sometimes called Straight Life Insurance, whole life insurance gives you long term protection. Whole life provides insurance protection at a level premium for the life of the entire lifetime of the insured.

Whole Life covers you for as long as you live if your premiums are paid. You generally pay the same amount in premiums for as long as you live. When you first take out the policy, premiums can be several times higher than you would pay initially for the same amount of term insurance. But they are smaller than the premiums you would eventually pay if you were to keep renewing a term policy until your later years. Some whole life policies let you pay premiums for a shorter period such as 20 years, or until age 65. Premiums for these policies are higher since the premium payments are made during a shorter period.

Universal Life:
Universal life first issued back in 1980, and is a combination of term insurance and a currently tax– deferred savings plan.

Universal Life is a kind of flexible policy that lets you vary your premium payments. You can also adjust the face amount of your coverage. Increases may require proof that you qualify for the new death benefit. The premiums you pay (less expense charges) go into a policy account that earns interest. Charges are deducted from the account. If your yearly premium payment plus the interest your account earns is less than the charges, your account value will become lower. If it keeps dropping, eventually your coverage will end. To prevent that, you may need to start making premium payments, or increase your premium payments, or lower your death benefits. Even if there is enough in your account to pay the premiums, continuing to pay premiums yourself means that you build up more cash value.

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