Educate Yourself!

Life insurance is a financial tool that provides protection when you die and, with certain policies, benefits you can use while living—such as access to cash value, tax-advantaged growth, and funds for emergencies, opportunities, or retirement income.

Life insurance generally falls into two main categories, with a few variations inside each:

Term Life Insurance
Provides coverage for a specific period (such as 10, 20, or 30 years). It’s designed purely for protection and does not build cash value.

Permanent Life Insurance
Provides lifelong coverage and includes a cash-value component that can be used while you’re living. Common types include:

• Whole Life Insurance – Fixed premiums, guaranteed cash value growth, and a guaranteed death benefit.

• Universal Life Insurance (UL) – Flexible premiums and adjustable death benefits, with cash value tied to interest rates.

• Indexed Universal Life Insurance (IUL) – Cash value growth linked to a market index, with downside protection.

• Variable Life Insurance – Cash value invested in market-based subaccounts, offering higher upside and higher risk.

At a high level, term insurance is about temporary protection, while permanent insurance is about long-term protection plus living benefits—the difference between renting coverage and owning a financial asset.

There’s no universal “better”—term life and whole life serve different needs.

Term life is straightforward and affordable. It gives you pure protection for a set period (10–30 years). That makes it a strong choice if your main goal is to replace income, cover a mortgage, or protect dependents during your working years.

Whole life is a permanent policy that never expires (as long as you pay premiums). It also builds guaranteed cash value you can access while you’re alive. That makes it more of a long-term financial tool—part protection, part savings vehicle.

Here’s the core distinction:

• Term life is simple, lower cost, focused on protection.

• Whole life is long-term, higher cost, with guaranteed cash value growth.

If you want the most coverage for the lowest price and your needs are time-bound, term usually wins. If you want lifelong coverage plus guaranteed cash value and financial predictability, whole life can make sense.

Best choice depends on your goals, budget, and long-term plan. A quick rule of thumb: buy term for income protection; consider whole life if you want lifelong coverage and a cash-value asset.

The best age to get life insurance is as early as possible, once you have someone or something to protect.

Here’s why timing matters:

Life insurance is priced primarily on age and health. The younger and healthier you are, the lower your cost—and that price is often locked in for life on permanent policies.

Practically speaking:

• In your 20s–30s, insurance is cheapest and easiest to qualify for.

• In your 30s–40s, it’s still very affordable, especially if you’re healthy, married, or have kids.

• In your 50s and beyond, costs rise quickly and health issues can limit options.

The deeper truth: the “right age” isn’t about a number—it’s about buying before you need it. Once health changes, options shrink and prices climb.

In short:
The best time to get life insurance is before life makes it more expensive.

Yes—but only with certain types of life insurance.

If you have permanent life insurance (such as whole life or indexed universal life), the policy can build cash value that you may access while you’re living.

There are two common ways to do this:

Withdrawals
You can take money out of the policy’s cash value. This may reduce your cash value and death benefit, and withdrawals above what you’ve paid in can be taxable.

Policy loans
You can borrow against the cash value without a credit check. Loans are typically tax-free and don’t require repayment on a schedule, but unpaid loans reduce the death benefit.

Term life insurance does not allow withdrawals because it has no cash value.

Important distinction: you’re not withdrawing from the death benefit—you’re accessing the cash value inside the policy. How and when to do this matters, so it should be done strategically.

If you outlive your term life policy, the coverage simply expires.

That means:

• The policy ends

• No death benefit is paid

• Premium payments stop

Nothing “bad” happens—you just no longer have coverage.

At that point, you usually have a few options:

• Let it end if you no longer need life insurance

• Renew or convert the policy (often at a higher cost)

• Apply for new coverage, which depends on your age and health at that time

This is the tradeoff with term life: it’s affordable protection for a specific window of time, not lifelong coverage. If you still need insurance later, the cost will be higher than when you first bought it.

In simple terms, outliving a term policy means it did its job—you’re still here—but the protection was temporary.