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Cash Value Life Insurance - Is it Worth it to You?

When you reach a point in your life where it is time to purchase a life insurance policy, you have two choices. Those choices are, term life insurance or permanent life insurance. When you choose a term insurance, that simply means that you are covered only for a certain period of allotted time, usually they run in 10, 15, 20 and 30 year increments. Generally, if you live past the allotted time, your beneficiaries do not receive any payment.

This is a good choice of insurance to purchase if you are over a certain age and your lifespan is not expected to exceed past your purchased year price. Permanent life insurance, however, covers you for your entire remaining lifespan. Cash value life insurance is a wise investment to make if you have a desire to leave your children an inheritance.

One of the biggest selling points to someone who is considering a permanent life insurance plan, is that a portion of your premium payments is applied to a cash value account that becomes tax deferred over a certain amount of time, which will help your children avoid paying inheritance tax or any other kinds of taxes after your death, which gives them more money in their pockets.

It is important to note that permanent insurance premiums will cost more for you, for obvious reasons. If you opt for a term policy, you will most definitely be paying quite a bit less in premiums; however, you are also taking a risk. Perhaps you purchase a term life policy and pay a certain amount of money into it every month and you surpass the term. Basically, that money will have just been thrown away and not utilized as it was intended to be.

If you feel as though your lifespan may come to an end before the term is up (perhaps with a terminal illness, etc.) then a term plan is most definitely for you. If you are a relatively healthy person, with no underlying health issues, a permanent cash value insurance plan is most definitely a smarter way to go. Leaving your children and inheritance is a very important thing to some people and a life insurance policy is a way to guarantee that you leave your children something after you have passed away.

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