September is Life Insurance Awareness Month!
Life Insurance Awareness Month is a timely reminder to evaluate one of the most important financial tools available: life insurance. Whether you’re starting a family, growing a business, or planning for retirement, life insurance plays a vital role in protecting your loved ones and securing your financial legacy.
Many people put off reviewing their life insurance, assuming their current coverage is “good enough.” But life changes – marriage, children, homeownership, career shifts – and your insurance should evolve with you.
Understanding the Basics: Term vs. Permanent Life Insurance:
Life insurance generally falls into two main categories: term and permanent. Each serves a different purpose and offers unique benefits.
Term Life Insurance:
Term life insurance provides coverage for a specific period – typically 10, 20, or 30 years. It’s often the most affordable option and is ideal for covering temporary needs such as:
- Income replacement during working years
- Mortgage or debt protection
- Funding children’s education
If you pass away during the term, your beneficiaries receive the death benefit. However, if the term expires while you’re still living, the policy ends unless renewed or converted.
Key Features:
- Lower initial premiums
- Fixed coverage period
- No cash value accumulation
Permanent Life Insurance:
Permanent life insurance provides lifelong coverage and includes a cash value component that may grow over time. There are several types, including whole
life, universal life, and variable life, each with different flexibility and investment options. Permanent insurance is often used for:
- Estate planning
- Wealth transfer
- Business succession
Key Features:
- Lifetime coverage
- Wealth transfer
- Can be used as a financial asset
Our team at First Citizens Wealth Management is happy to help evaluate your current situation to determine if adjustments need to be made to your insurance planning.