ESTATE PLANNING PROBATE NEWSLETTER
Your Estate Plan: Life Insurance Considerations
Many estate plans also include life insurance policies as part of their comprehensive package. If you decide to include a life insurance policy as part of your estate plan, you must first assess your individual needs. There are many types of life insurance, but most can be categorized as either "term" or "permanent" life insurance.
Term life insurance is coverage for a specific amount of time. If you die before the term expires, the benefit will go to your designated beneficiaries. If you don't die before the term expires, your beneficiaries do not get paid the death benefit of the policy. Generally, some of the features of term life policies include:
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Short-term coverage
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Less expensive than permanent life insurance
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More flexible if you want to change policies
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Can be "Non-Guaranteed Term Life" or "Yearly Renewable" and "Convertible Term Life"
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Premiums generally increase with your age
Permanent life insurance is not quite as simple. Permanent life insurance has many variations, because in addition to the benefit payable upon your death, there is also a build up of cash value. Generally, the features of permanent life insurance include:
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Long-term coverage
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More expensive than term life coverage
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Cash-value build-up for a long-term investment
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Can be either "Whole Life," "Universal Life" or "Variable Life"