LIFE INSURANCE - TERM OR CASH ACCUMULATION

Life insurance is important and needs to be considered by anyone who has a financial responsibility for a family, relative , loved one and/or wants to leave a legacy in their name. But the type of program to be considered , depends on what you wish to accomplish and how long you think you will need the protection.

Here are some guidelines and a short rundown of what your options are :

TERM LIFE INSURANCE - a term insurance program is just like the name says - It is a policy that runs for a certain period of time and then expires. For example, term insurance plans normally are for 5,10,15,20,or 30 years. Term life insurance is less expensive then a cash accumulation plan , but could cost you more in the long run if you needed the coverage and the guaranteed premiums increase at the attained age renewal. Term life insurance should be used when you need coverage for a fixed period of time . For example, to cover a mortgage, to provide money so your child can go to college,etc.

WHOLE LIFE INSURANCE - a cash accumulation program where the premiums are calculated to keep the coverage in force to age 100 . This program will provide protection for your lifetime and there will be a cash savings part, that will allow you to borrow money at a low cost and/or cash out the policy.This type of program is good for long term needs and obligations.

UNIVERSAL LIFE INSURANCE - a cash accumulation program just like the whole life program , except that you have more options to custom design a program to fit your particular needs. For example , since this program uses current interest rates , you can adjust your premium payments,the lenght of the contact,the cash accumulation and use it as a way to save for your retirement. This program is good for long term needs,retirement,college funds just to name a few.

VARIABLE LIFE INSURANCE - a cash accumulation plan just like the whole life and universal programs, except the cash value is invested in mutual funds - thus tied into the stock market. The market will effect your cash value and could require you to increase your normal premium payments. This is a good plan for someone who likes the universal program , but thinks they will get a better return if the cash value was based on the stock market and not a fix investment.

When buying life insurance , keep in mind that more than one plan may be necessary to provide the protection at a reasonable cost. Term insurance for the short term or fix period of time need and a cash accumulation plan to cover the long term or lifetime need. Also, when looking at premiums, sometimes a cash accumulation plan is less expensive than a term plan if you need the coverage for more than 20 years.

things to remember

(1) the agent is paid well to sell the product. Thus, they are not always truthful and may be out for their own best interest.The insurance industry pays 90-100% of the commision to the agent in the first year of the contract. Be especially wary when an agent wants to switch you from one program to another and doesn't really have a fair comparison why.

(2) The schedules and/or projections you will receive are confusing. Be sure you understand the differences between the guaranteed projections versus the current and/or midpoint projection. If you do not understand - DO NOT PROCEED until you do.

(3) Consider shopping around and stay with A+ rated insurance carriers.

(4) The younger you are - the lower the rates and if you purchased a cash accumulation plan the more cash value you will have. Start your program early!

(5) If you are unhealthy - consider a cash value plan versus a term plan due to rating of premium and offset of cash value.

In summary, life insurance is a necessary security blanket to protect your obligations and should be reviewed as often as your automobile and homeowners coverages.

For more information ,contact Chuck Lurie at El-Mar Associates, Inc., 7000 security boulevard,Suite #332, Baltimore,Md 21244 or call 410-265-7070 or e-mail at sanchuck@erols.com or go to web site at http://www.elmarassociates,inc.