Page 13 - AAA Now! – AAA Central Penn – Fall/Winter 2020

INSURANCE SERVICES
Term vs. Permanent: We Break it Down
As you reach critical milestones in your life, you may find yourself looking for ways to protect what you’ve built. Life insurance offers that protection in the form of financial coverage for your loved ones if you pass away.
How much do they cost?
Term
Term insurance is known for its low premiums and guaranteed payouts. Your beneficiaries will get a tax-free lump sum of money if you pass away while you have this coverage.
Permanent
Many permanent life insurance policies also accumulate cash value over time. Each month, your premium payment goes towards your life insurance coverage and an investment element. You may borrow or withdraw that money from the investment side for whatever needs may come your way. Keep in mind that any withdrawals could reduce the death benefit if they aren’t paid back.
Can I convert a Term policy to a Permanent policy?
Yes. Many people “convert” their term coverage to a permanent policy. This conversion privilege, which is available in many term policies, may offer those who cannot initially afford permanent insurance an opportunity to switch at a later date. Discover why it may be beneficial to convert your life insurance policy.
What are the benefits of converting Term insurance to a Permanent policy?
When you convert a Term policy to a Permanent policy,
it typically eliminates the need to undergo a new medical examination or provide updated financial information – as long as there are no increases in the coverage amount or any additional riders. There may be other restrictions and limitations, so please contact a AAA agent to discuss your options.
Can I buy both Term and Permanent Life Insurance?
Yes. Many people use a combination of these two types of life insurance to cover temporary and permanent needs.
But which type of life insurance is best for you? Many people don’t know there are different coverage options to begin
with or where to start. Whether you just bought a house, got married, started a family or recently retired, there’s a type of life insurance to fit your ever-changing coverage needs.
Term
Term life insurance is generally designed for young families to take care of specific, immediate needs like a mortgage, educational expenses, automotive loans or anything else you might need to cover for your loved ones.
Permanent
Permanent life insurance is typically designed for those with lifelong needs, which may include estate planning, retirement income and all of your final expenses (like funeral and burial costs).
What is the length of coverage?
Term
Covers you for a specific period of time, also known as a term. Often, terms are available in 10, 15, 20, 25, and 30-year lengths, and you can choose the length of coverage that’s right for you.
Permanent
As long as premiums are paid on time, permanent coverage is designed to last a lifetime.
Get covered for life. Get a quote.
Regardless of which type of insurance you choose, you have so many reasons to take the necessary steps to keep you and your family covered. No one plans to pass away, but when it happens, it’s reassuring to know that their college tuition, the household bills, your final expenses, and other costs today and 30 years down the road could be taken care of.
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