TERM
Advantages:

  • Initially premiums are lower than those for permanent insurance
  • It allows a person to buy higher amounts of coverage, especially at a younger age
  • This is a great product for young families that often have a limited budget, but a significant need for protection
  • It can cover specific needs that will disappear in time, such as a mortgage or other types of loans
  • Certificates are renewable

Disadvantages:

  • Once term ends, if you purchase a new certificate the premium increases due to age
  • Certificate premiums increase based on age of applicant
  • Coverage terminates at the end of the specified term
  • You may not be able to convert to permanent insurance because of health
  • Does not accumulate cash values or dividends

WHOLE/PERMANENT

Advantages:

  • Guarantees lifelong protection as long as premiums are paid
  • Generally, premium costs are fixed
  • Develops cash values, which can be borrowed against; loans must be paid back, otherwise death benefit will be reduced by the amount of the loan at time of death
  • Cash values can be surrendered, in total, or in part, for cash or to convert to an annuity
  • Cash values can be used to pay future premiums or provide paid-up insurance
  • Generally dividend participating – can be used to reduce the amount of future premiums needed or purchase additional paid-up insurance

Disadvantages:

  • High initial premium levels may make it hard to buy enough protection
    May be more costly than term, especially if you do not keep it long enough

In most cases, a permanent plan may be the best type of life insurance to purchase. If the prospects are a young family with a home, cars, loans etc., and appear to need high amounts of coverage or if they wish to insure for a specific period of time, then term insurance may be the right plan.

3 questions to answer: Do you need insurance? How much? What type?

Contact your local PRCUA Sales Representative and complete a Needs Analysis to determine which plan will accomplish your goals.