“I already have a term life insurance policy through work that will pay triple my salary if anything happens to me. I really don’t need anymore than that, right?”
The simple answer is, you only need that term insurance policy if you don’t plan to outlive your employment. That policy only covers you for the term of your position with that company. Once you leave that job you no longer have your life insurance policy or any of the other benefits that come with your employment. In order to make sure you are covered for the length of your life and have permanent life insurance.
Term life insurance really is the simplest coverage and only lasts for the length of time specified by the term. Whether your employer provides it or you purchase it separately, your loved one’s benefit after you’re gone if you don’t outlive the term.
Beyond term life insurance though, you have the option of Whole Life or Universal Life, which are considered permanent life insurance. These give you more options and can even act as savings vehicles for you. As you pay premiums into your life insurance account you build cash value, earn interest at rates higher than most banks are able to pay, and as long as your policy is paid up, your death benefit stays level.
Depending on the policy you choose there are more benefits wrapped up inside the policy as well, but thinking about saving for retirement, kids’ college funds, or even an unplanned emergency; the money you need is available in your life insurance policy. As for retirement you may think a 401K is enough, you may decide to retire earlier than 59 1/2 and with a permanent life insurance policy you can make withdrawals without tax penalty. Your whole life policy gives you more flexibility and your death benefit stays level as long as your premiums are paid. It also gives you the option to help a child with school funding without taking expensive student loans.
An AC Financial Adviser can explain the benefits of owning a permanent life insurance policy, including using it as part of your retirement planning. Call 800-564-3136 for more information.