Planning for the unexpected with JMD
Why invest in life insurance?
Many people wonder, “Do I really need life insurance?” At JMD we advise all clients who can afford even a small monthly premium to invest in some form of life insurance.
The primary reason for this is that life insurance is the simplest, most cost effective way to protect family and loved ones who depend on you. Another important reason is that certain types of life insurance can also function as tax efficient investment vehicles.
Types of coverage:
Broadly speaking, there are two major types of life insurance, “permanent,” which covers your entire life, and “term,” which covers a pre-set number of years.
Here are the key benefits of each in laymen’s terms:
Permanent Life Insurance:
- Peace of mind
- Coverage for your entire life
- The ability to accumulate cash value over time which can be borrowed against tax-free or used for retirement or other goals
Term Life Insurance:
- Peace of mind
- Coverage during pre-set, high-need periods (i.e. until the mortgage is paid off or while the children are in school)
- Lower monthly premiums than permanent policies
- Option to convert to permanent with no medial exam when term is up
“When I was just getting started in the business one of my mentors likened the difference between term and permanent plans to the difference between renting and buying a house. With term insurance, you pay a monthly premium to be covered for the term of the plan, similar to paying rent to enjoy a home during the term of your lease. With permanent insurance, you pay a monthly premium to be covered for your entire life, similar to paying a mortgage to own a home forever.”
–Peggy Dwyer
Founder & President, JMD Insurance Agency
Choosing the right coverage:
Both types of policies have benefits and drawbacks. Deciding on the type and face amount (i.e. the sum your beneficiaries receive when you pass) that is right for you and your family will depend on your unique life stage, coverage needs and budget. JMD agents are trained to help you navigate these important decisions while weighing competing offers from top carriers. Contact us for a free, no-obligation consultation and quote.