Think you don’t need life insurance? Think again.
Many people think they don’t need life insurance because they are protected in some other way. While other sources of income are important, will they be enough?
- Savings and investments
If you think you can only afford to put money either into savings and investments or buy life insurance, consider buying life insurance first because:
- The money is guaranteed as long as the policy is in force.
- Fiscal discipline is built into the plan.
- Management expertise is provided for you.
- Lost income due to death is replaced for your family by proceeds from the policy.
- Social security
Social Security benefits generally fall short of what your family will need. Furthermore, a surviving spouse will not be eligible for even partial benefits unless he or she is caring for an unmarried child under 18 or until he or she turns 60.
- Employee benefits
You may have some life or disability insurance through your employer, but:
- Group coverage through employers is usually term insurance, which does not build cash value.
- Group coverage does not stay with you if you change jobs or retire.
- The values are probably not enough to maintain your family’s standard of living.
Personally owned life insurance can help ensure a secure financial future for you and your family. And the sooner you start, the less expensive it can be.
Term Life Insurance
The main features of term life insurance are as follows:
- Designed for individuals with a temporary need for coverage
- Pays a benefit only if you die while the policy is in force
- Offers initial, basic protection for the lowest premium
- Over time, it is more cost-effective than permanent insurance
The types of term insurance policies are:
- Level term
Provides a level (or fixed) death benefit for a specified number of years (usually 5, 10, 15, or 20) at a guaranteed level premium
- Annually renewable term
Provides a level death benefit for a specified number of years, but premiums increase each year
For a specified period of time, most term policies can be converted to permanent life insurance regardless of your insurability.
The main features of permanent life insurance are as follows:
- Provides coverage for an insured’s lifetime
- Generates cash value that accumulates tax-deferred
- Can be borrowed against to cover college expenses or to supplement retirement income. Please Note: Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the benefit and policy values.
The types of permanent life insurance are:
- Whole life
Provides a level death benefit, generally at a level premium. Types of whole life policies include limited, single, or step-rated premium-paying durations.
- Universal life
Provides an adjustable death benefit. Cash values are based on the company’s current interest earnings, and premiums are flexible as long as there is sufficient cash value to cover all policy charges and expenses each year.
- Variable universal life
Provides an adjustable death benefit. The cash value of your policy is based on the performance of separate investment accounts held inside the policy. Because earnings are tied to the market, it is possible for the policy to fluctuate up or down. Investors should consider the investment objectives, risks, charges, and expenses of a variable insurance product carefully before investing. Please carefully read the prospectus for the relevant variable insurance product and its underlying investment options, which contain this and other information about the product. You can obtain a prospectus from your Financial Professional.
- Survivorship life
Provides coverage for two people under one contract. The death benefit is paid to the named beneficiary at the second death. Premiums are based on the age and rating of each insured.
A variety of riders can be added to a policy to customize it to your individual needs and objectives.
Penn Mutual offers a selection of insurance products
Penn Mutual specializes in services that help you plan for your financial goals while growing and protecting your assets and creating security for you.
Learn more about the products offered by Penn Mutual.
A Financial Advisor can help
Working with a Financial Advisor has many benefits. They’ll analyze your financial needs—and help you develop plans to manage and meet your financial needs with confidence.
Next, you can read about disability insurance.
All guarantees are based upon the claim-paying ability of the issuer.