Term Life Insurance
Term life insurance is like renting an apartment. You pay for coverage for 5, 10, 20, or 30 years, and IF YOU outlive the designated time, you lose ALL coverage.
Pros:
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More affordable coverage
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There is no guarantee of renewal when the term ends; however, certain term policies may allow for an option to renew
Cons: If you outlive the term, YOU NO LONGER have life insurance
Whole Life Insurance
Permanent life insurance is like owning the house instead of renting. You’re covered for life, and you build up cash value that you can borrow against.
Pros: Lifetime coverage, savings growth
Cons: Higher premiums
Return of Premium Insurance
"Mortgage Protection"
Term insurance that allows policyholders to recover all/part of the premiums paid over the term of the policy; should he or she live past the stated term in the contract.
Pros: Ideal for homeowners to protect their mortgage in case of tragedy
Cons: If you outlive the term, YOU NO LONGER HAVE INSURANCE
Index Universal Life Insurance
This one’s for the strategists who want to "BE YOUR OWN BANKER"
Permanent insurance policy with flexibility of premium payment and death benefit; however, it also features a higher growth potential through index interest crediting.
Pros: The policy owner has the ability to choose a percentage of the cash value to invest within specified “index interest crediting” (such as the S&P 500 or Nasdaq 100) to increase the chances of larger returns.
Cons: Higher premium
*Most new insurances offer Living Benefit riders*
An annuity is a insurance product that allows you to convert a lump sum of money into a stream of regular payments to yourself potentially for the rest of your life.
Pros: Tax- Deferred Growth, Protection against Market Loss, Avoid Probate
Cons: Penalty for early withdrawal prior to 59 1/2, Surrender Charges
ANNUITIES
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Guaranteed retirement income; supplemental income to social security
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Protects your money from market loss
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Options for lifetime payments
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Excellent for building stability at any age