1. Life Insurance
Note Information in this presentation is derived from Insurance for Dummies by Jack Hungelmann. I highly recommend this book.

2. Do You Need Life Insurance?
Simple Rule If someone would be significantly hurt financially by your death, you need life insurance.

3. A Time Value of Money Problem
How Much Do You Need
A Time Value of Money Problem

4. Two Types of Life Insurance
Term
Permanent
Mortality Cost
Yes
Policy Expense Cost
Cash Value No
Length
Specific Term
(e.g., 15, 30 years)
Covers your entire life
Cost
Inexpensive
More expensive than term

5. Which Type– Term or Permanent?
For most, term insurance will do the trick because if all goes well, you will only need life insurance for a set time period (e.g., until your kids graduate from college)
cheaper– buy term and invest the difference
Permanent life insurance could be useful for those needing insurance up to death for purposes such as paying estate taxes or supporting an adult child with a disability

6. Three Main Types of Term
Annual Renewable
Fixed-rate level Term
Level Decreasing Term
Mortality Cost
Goes up each year
Annual Coverage
Stays the same
Stays the Same
Declines (e.g., 25 year decreases 4% each year)
Lengths
Annual
Typically, up to 30 years
Typically, 15 – 30 years
Renewable
By paying premium each year
Renewed without medical proof
Renew requires medical proof
Usually not
Premium
increases
Locked in pricing from 5-30 years in 5 year increments

7. Permanent Life Insurance Types
Universal Life: variable cash value yield
Whole Life: fixed cash value yield
Variable Life: variable cash value yield– many investment options including the stock market
There are other differences that require additional research if you consider a permanent policy.