First, assemble personal financial information and review your family s needs. One rule of thumb is to buy life insurance that is equal to five to seven times your annual gross income. It pays a benefit only if you die during the term. The policy may cover a fixed period of time with a fixed premium, or over time, the premium will increase with the policy s value unchanging, or the policy s value will decrease and the premium remain unchanged. It is important to remember that most term policies have no cash surrender value, which means premiums are usually lower than any of the permanent insurance types.
Permanent insurance provides lifelong protection and is known by the names described above.
As long as you pay the necessary premiums, the death benefit always will be there. These policies are designed and priced for you to keep over a long period of time. If you don t intend to keep the policy for the long term, it could be the wrong type of insurance for you. Generally, the longer a policy is kept, the more cash value it will have. If you need to stop paying premiums, you can use the cash value to continue your current insurance protection.