Creating a legacy for a favorite charitable organization could be the primary reason for purchasing life insurance. Insurance can be a means of creating family wealth. Life insurance receives tax-favored treatment in the buildup and distribution of accumulated cash value. A reassessment of insurance coverage would be prudent following events such as a marriage, birth of a child, changes in children's needs, and growth in personal wealth. Of these three methods, the needs approach is the most accurate for determining the amount of insurance needed to provide for future financial requirements.
Term insurance is generally most appropriate for specific short-term needs.
There are a several term insurance products available. In Decreasing Term insurance, the level of coverage declines gradually over the term of the policy, but premiums remain at a constant level. Renewable Convertible Term insurance provides renewable coverage and the option to convert to permanent insurance at any time. Whole Life insurance is a cash value policy with a fixed death benefit that endows at age 100. Premiums usually start higher than term insurance premiums, but payments are at a fixed level for the insured's life.