H EADLINES
ABCs (and Ds)
of Buying Life
Insurance F INANCE
BEN FELD | JE FEATURE
SURE, A LOT of companies
like to give you the ABCs of
buying life insurance, but we
think it’s important enough to
off er a Step D as well.

No one really likes to talk
or think about life insurance.

But for millions of Americans,
life insurance has become the
cornerstone of their family
fi nancial plans. To that end,
how do you determine how
much — and what type — of
life insurance is right for you?
Let’s talk about individual, not
business, life insurance.

First to consider, there are
two basic types of life insurance:
Term life provides death
benefit protection of the
insured for a certain number
of years, typically fi ve, 10, 20
or 30. It is oft en called “pure”
life insurance, as all of the pre-
miums are used to pay for the
coverage only; there is no cash
value component.

Permanent life, oft en in
the form of whole, universal
and variable universal, pro-
vides death benefi t protection
but adds the potential for tax-
deferred cash value. Th is is
capital that can be accessed via
policy loans and withdrawals
for living benefi ts such as sup-
plemental retirement income,
college tuition payments, home
improvements or a host of
other fi nancial needs.

Step A: Assess your imme-
diate needs. And we do mean
immediate. In fact, the best
time to buy life insurance was
yesterday — before you actu-
ally have a need. Because the
earlier in life you can buy, the
chances are the lower the pre-
miums will be — whether for a
term or permanent policy. Now
JEWISHEXPONENT.COM is the time to learn what life
insurance can mean for your
fi nancial plans. Remember,
term life provides death benefi t
protection for a specifi c period
of time and permanent life
provides death benefi t protec-
tion plus the potential for cash
value to provide living benefi ts.

Step B: Assess your future
needs. Time to have that pro-
verbial chat with yourself. Do
you see yourself getting mar-
ried and having children? Are
you expecting a long period
of being single? Have you
thought through the costs of
raising a family and what an
untimely death could mean to
your fi nancial planning? It is
a lot to think about. But the
sooner you can plan ahead, the
sooner you can make a choice
about life insurance and how
cost-eff ective it may be.

Step C: Determine how
much you can aff ord. A tricky
point to be sure, but one that
cannot be overlooked in your
planning. Generally speaking,
term life is going to cost less
than permanent. So while you
can buy more actual life cov-
erage with term, that coverage
will end at the end of the spec-
ifi ed term (and sometimes will
increase in cost as the policy
gets down the road).

Some liken the choice of
term versus permanent to the
age-old question of renting
versus owning. Permanent life,
as noted above, does have the
potential to build cash value
but generally comes with
higher premiums than term.

But just like the question of
owning versus renting, nothing
is totally black and white. Term
policies, for example, oft en off er
the ability to convert to perma-
nent. And permanent policies
may not project the cash val-
ues you think you will need
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And there is what some call
the “X” factor: Will you need to
undergo medical underwriting
at some point if you want more
insurance? Th at will aff ect cost.

Step D: Find a fi nancial pro-
fessional with whom you feel
comfortable. He or she will
JEWISH EXPONENT
review your fi nancial needs
and wants with you, help
assess what policy is right for
you and navigate the diff er-
ences in costs among policies.

Part of this person’s job is to
make sure all of your ques-
tions are answered, so make
sure you ask them. Th en
you will feel positive about
your choice of life insurance.

And since you should
have started yesterday, now is
most defi nitely the time to get
started. Building the corner-
stone of your fi nancial future
is too important to wait on. ●
Ben Feld is an adviser with
1847Financial in Conshohocken.

MARCH 21, 2019
13