01/15/2025
When considering a life insurance policy and deciding between a permanent/cash value policy or a term policy, ask yourself the following questions:
Personal and Financial Goals
1. What is the primary purpose of the life insurance policy? (Income replacement, debt coverage, legacy planning, etc.)
2. How long do I need coverage? (For a specific period, like while raising kids, or for life?)
3. Do I want the policy to provide a cash value I can access during my lifetime?
Financial Situation
4. What is my current budget for life insurance premiums?
5. Do I have significant long-term financial responsibilities (e.g., mortgage, college savings)?
6. What other investments or savings vehicles do I already have in place for retirement or emergencies?
Dependents and Legacy Planning
7. Who depends on my income, and for how long will they need support?
8. Do I want to leave an inheritance or contribute to a cause after my death?
Policy Features
9. Am I comfortable with the higher premiums of a permanent policy in exchange for cash value benefits?
10. Do I need the flexibility to convert a term policy to permanent coverage in the future?
11. Do I understand the costs, risks, and benefits associated with permanent policies like whole life or universal life?
Lifestyle and Health
12. What is my current health status, and how might it affect my insurability or premiums?
13. Could my life insurance needs change due to significant life events (e.g., marriage, kids, retirement)?
Comparison of Policy Types
14. How do the premiums for term and permanent policies compare for my age and coverage amount?
15. Is the investment component of a permanent policy worth it compared to other investment options I have?
Consultation and Future Planning
16. Have I consulted a financial advisor or insurance professional to assess my needs?
17. What happens if I outlive a term policy? Can I renew it or convert it to permanent coverage?
18. Do I want a policy with fixed premiums, or am I comfortable with potential increases (as with some term renewals)?
Answering these questions can help you clarify your goals and make an informed decision.
