Few people who have bought insurance -- or even window-shopped for it -- have escaped the debate over term versus permanent insurance.
And the wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today. So, the first and most important decision you must make when buying life insurance is: term, permanent or a combination of both? Let's look at each.
Term life policies offer death benefits only, so if you die you win (so to speak). If you live past the length of the policy, you (or, more specifically, your family members) get no money back.
Permanent life policies offer death benefits and a "savings account" (also called "cash value") so that if you live, you get back at least some of, and often much more than, the amount you spent on your premium. You get this money back either by cashing in the policy or by borrowing against it.
By Ginger Applegarth
And the wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today. So, the first and most important decision you must make when buying life insurance is: term, permanent or a combination of both? Let's look at each.
Term life policies offer death benefits only, so if you die you win (so to speak). If you live past the length of the policy, you (or, more specifically, your family members) get no money back.
Permanent life policies offer death benefits and a "savings account" (also called "cash value") so that if you live, you get back at least some of, and often much more than, the amount you spent on your premium. You get this money back either by cashing in the policy or by borrowing against it.
By Ginger Applegarth
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