If you’re a wage earner, you’ll want to replace your salary plus provide for any additional needs, such as paying off the mortgage, college tuition or career training for a spouse who may be re-entering the work force.
How much should I buy?
Term Universal life:
A new hybrid that offers more flexibility than a term policy. Term UL lets you extend the term of the policy after you are in the plan.Unlike term, you can choose from 10 options, tailoring the policy to your current financial state.
Term is the simplest form of insurance to understand and the type most financial experts recommend because it allows you to purchase the most coverage for the least amount of money. Purchase a policy for a specific amount that will cover you for a particular time period (or term).
Rather than covering you for a part of your life (as with term) whole life will cover you for your entire life, as long as you keep up the premiums. Whole life coverage is moreexpensive than term, and part of the premiumwill be set aside in an account designed to help cover the cost of the premium as you get older
A blended life insurance policy starts out as a combination of term coverage and permanent coverage. Future dividends paid on the policy are used to convert the term coverage into permanent coverage.
UL covers you for as long as you make the premiums and contains an investment component. (In one variation, known as “universal variable” you choose the investment vehicle.) Beneficiaries either receive the face value or the face value plus the cash valueof the investment account. The face value can rise and fall with the value of the investments.
Similar to universal variable life, but usually offering more investment options, including stocks, bonds and mutual funds. The face value will rise and fall with the value of the investments.