Protecting your loved ones with the right amount and right type of life insurance is a caring and responsible act.
Determining the Right Amount
A sound financial strategy can be built on a foundation of life insurance. Assessing your family’s financial needs will help you determine the right amount of coverage to help protect their standard of living. Your financial professional has the experience and tools to help you do this.
Deciding on the Right Type of Coverage
Once you know how much you need, the next step is to decide what type of coverage is right for you. There are two basic types of life insurance to choose from:
- Permanent insurance offers lifetime protection, which means that your beneficiaries will receive a death benefit no matter how long you live. Whole life insurance is one type of permanent coverage that also accumulates guaranteed cash value which can be used to help address life’s opportunities and challenges.
- Term insurance provides temporary coverage for a specific period of time and only offers death benefit protection. Consequently, the initial premiums for term insurance may be lower than for a comparable amount of permanent coverage. In addition, there is no cash value component with term life insurance.
One way to understand the differences between permanent and term insurance is by comparing owning a home to renting one.
Similar to a fixed mortgage on your home, the premiums for most permanent life insurance policies remain level and do not increase over time. While term insurance premiums are often level and more affordable initially, they can increase if you choose to renew your coverage, much like rent can increase each time a lease is renewed.
Like owning a home, permanent insurance can be yours for life. Term insurance is similar to renting where you may have a significant rate increase or the policy may expire after the initial period. If you still need coverage, you may need a new policy – just like a renter who has to find a new place to live.
Most forms of permanent insurance build equity on a tax-deferred basis in the form of cash value. Like the equity in a home, you can borrow against the cash value in your policy for any reason. In contrast, term insurance, like rental property, does not build equity because there is no cash value component.
Combining Whole Life and Term
Choosing the right type of life insurance is important. However, it doesn’t have to mean choosing one type over another. Many people find that a combination of both term and whole life insurance is the best approach to help meet their protection and accumulation needs, at a price they can afford.
Your financial professional can help you determine the right amount and right type of life insurance to help meet your financial needs, and can answer any questions you may have.
For more information, please contact:
Financial Sales Representative
CA Insurance License #OG60868
Patricia Ward, LUTCF
Financial Services Representative
CA Insurance License #OG72810
 Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10% tax penalty if the policyowner is under age 591/2.
Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.
NOT A BANK OR CREDIT UNION DEPOSIT OR OBLIGATION • NOT FDIC OR NCUA INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT GUARANTEED BY ANY BANK OR CREDIT UNION
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MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.