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What Kind Do I Need

There are many kinds of life insurance, but they generally fall into two categories: term insurance and permanent insurance.


Term insurance, the most affordable type of insurance when initially purchased, is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.


Permanent insurance by contrast provides lifelong protection. As long as you pay the premiums, have no loans, withdrawals or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, premiums are higher than Term insurance. Another feature of permanent life insurance is that it can accumulate a cash value that term policies do not.


It's impossible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals. Often, term insurance is the best solution as it enables you to purchase the amount of coverage needed at the most affordable premium. The best way to figure out the amount and type of life insurance that makes sense for your particular situation is to meet with a qualified insurance professional.


Explore the other parts of this section to learn more about term and permanent insurance and the pros and cons of each.