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What Life Insurance Coverage Do I Need?

Should you get term life insurance or permanent life insurance? Boy, this is an age-old question that many disagree on. Term in life insurance is inexpensive when you’re young and usually makes more sense for young couples. It protects you when your income’s low, and it fits into your budget more easily, but term life insurance is exactly what it says. It’s a predetermined face amount in a predetermined length of time. When that time period ends, your life insurance ends. Also, understand that the older you get the more expensive life insurance gets. What we usually recommend at my agency is to do a review yearly to see where you are financially. Most term life policies have a conversion privilege within the first 10 years of the policy to convert it into a permanent policy that will last you the rest of your life.

Permanent life insurance does cost more, but if it’s purchased when you’re young, it can be very reasonable. It also builds equity just like your home does. It has options allowing you to borrow against the value built up in the policy. In the event you do decide to borrow some money out of your policy it’s considered a loan and you don’t have to pay taxes on the amount of money taken out. You can just pay the loan back or just have the loan deducted from the death benefit at the time of your death.

Also, all life insurance proceeds on a death benefit are tax-free to the beneficiaries. So I would always recommend you meeting with your trusted advisor and designing a plan that fits your needs. For more information on life insurance plans with Allstate, call Allstate Tim Rial Agency. You can reach us (817) 447-0719. Bye-bye.