What Life Insurance Option May Be Right For Me?

You have immediate financial concerns

Michael is a new homeowner whose daughter just got into the college of her dreams. He’s excited for her, but has added tuition to financial obligations like his mortgage and car payment. As the primary earner in the household, he wants to help support his family’s financial future if the unexpected happens.

Term life insurance can be an affordable way to help support financial obligations that have an expiration date — like mortgages and college costs. Michael may also want to consider obligations such as personal debts, medical bills and final expenses when choosing coverage amounts.

You anticipate future financial needs

Darrell purchased a type of permanent insurance policy called whole life back in his thirties. Now, the kids are grown, he paid off his house and he’s nearing retirement. Not only does he want the proceeds to help support his beneficiaries financially if the unexpected occurs, but he also wants to use the policy as a source of income when he stops working.

Darrell’s policy has accumulated substantial cash value over the years, which gives him several options. He can use its cash value to help pay for future premiums instead of paying them out of pocket. He can even borrow the cash value². Those are just a few examples of ways to use a whole life policy to help support financial obligations while the policy owner is alive.

You want to help children or grandchildren

When Alex and Maria had a daughter, Maria’s parents surprised them with an unexpected gift for little Sophie: a universal life policy. That’s when they learned a life insurance policy could help support a financial foundation for Sophie’s future.

Unlike money accumulated in some financial products for children like 529 college savings plans, Sophie doesn’t have to use the cash value of a juvenile life policy for educational expenses. In fact, she can use it to help support expenses such as starting a business or making a down payment on a house — whatever she wants.

You’re the key person in a business

Carla owns a busy boutique in the suburbs and knows its success requires careful planning. She wonders what would happen if she or a trusted general manager were to die. Individuals are the lifeblood of small businesses that may not survive the death of an owner, partner or key employee.

Carla can purchase a business life policy to help keep her company running through the transition period following the loss of a key person. Proceeds can help give a business some financial breathing room as it adjusts to the loss and moves forward.

You’re planning your legacy and charitable giving

Michelle and William have done well in life. Now retired, they enjoy spending time with their family, golfing and traveling. They’re also committed to the mission of a favorite charity — and want their support to continue once they’re gone.

They might do this by donating an existing permanent life policy if they determine they no longer need the coverage. The charity could then take over premium payments in expectation of the eventual death benefit. Alternately, they may continue paying premiums themselves and leave the policy’s proceeds to the charity as a bequest.