Life insurance can provide unique financial planning benefits, including an extremely tax-efficient way to transfer wealth to your heirs through the death benefit. However, the amount of the premiums paid on life insurance policies may determine whether your policy is still properly aligned with your financial goals.
Not All Policies Are Created Equally
There are important differences for you to be aware of between the two basic types of life insurance policies.
Term insurance generally has lower premiums but does not build up cash values that you can use in the future. It generally provides coverage for a level period – 10, 15, 20 or 30 years – and pays a death benefit only if you die during that term.