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Written by Adam Miller

As discussed last week, one of the major financial decisions both individuals and families must make in their lifetime is in regards to their life insurance needs. For some, the question might be how much insurance coverage is needed, while others might be more concerned about premium rates or flexibility with their coverage. Although a thorough Needs Analysis report can help identify many life insurance needs and goals for the future, it is critical to understand the various types of life insurance policies so an informed and financially sound insurance decision can be made.

If you are in need of life insurance coverage, first know that there are three major types of life insurance policies to consider for your specific needs: Whole Life Insurance, Term Life Insurance and Universal Life Insurance. Whole Life Insurance is a long-term form of life insurance that provides protection through your entire lifetime and accumulates a guaranteed cash value as long as premiums are paid as specified. The interest accumulated during the lifetime of the policy remains tax-free until it is withdrawn, and the cash value amount can be borrowed to use towards retirement, buying a home or paying a child's college tuition. Although there may be slightly higher premium amounts associated with Whole Life Insurance, it does provide peace of mind as it offers fixed premium amounts and comprehensive insurance protection regardless of your age or future health status.

Term Life Insurance is another form of life insurance that is very popular among Americans, especially younger individuals and growing families. Term Life Insurance is a short-term life insurance policy that is for a set period of years (5, 10, 15, 20 or 30) and offers a guaranteed death benefit but no cash value option. Term Life Insurance premiums are very affordable, but they can increase with age. For young individuals and growing families, Term Life Insurance is ideal as people can get larger amounts of life insurance coverage for cheaper rates while they are young and their future financial needs and responsibilities outpace their current income. Many growing families choose Term Life Insurance to ensure their mortgage and children's tuitions will be paid for in the event of the breadwinner's death.

Finally, the last major type of life insurance is known as Universal Life Insurance. Universal Life Insurance is similar to Whole Life Insurance in that the policyholder accumulates a tax-deferred cash value with the policy over time, but differs by investing the premiums and allowing accumulated interest to be used for premium payments. Policy charges and fees are deducted from the overall cash value each month, but the policyholder has flexibility on how the cash value accumulation can be used as well as the death benefit amount. Additionally, Universal Life Insurance offers permanent life insurance protection but at a slightly lower cost.

If you or your family needs help determining which type of life insurance offers the best protection within your budget, contact the insurance experts at Aegis. Aegis is a Houston-area insurance agency that specializes in providing custom insurance solutions that protect and provide when you need it most. The friendly and knowledgeable insurance agents of Aegis can assess your current and long-term financial goals and create a comprehensive life insurance plan that protects assets and family members from additional loss. Aegis can also offer substantial annual savings by bundling life insurance policies with auto, homeowners, renters or commercial insurance policies, lowering overall premium costs. Contact Aegis directly for more information or use their free online quote system to get insurance quotes today.

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