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Be Wise With Money

Life Insurance Basics

Get to know this essential part of your family's financial strategy

family sitting together

When you're sharing your life with your loved ones, you have more than your own life to consider. And that's why life insurance is such an important purchase. Along with its financial benefits, life insurance is an expression of your love.

Deciding to buy life insurance is simple. But what kind of life insurance? That's a bit more complicated. So let's look at your options:

For basic, relatively inexpensive insurance protection, term life could be a good choice. It provides coverage for a specified period of time, typically for terms of 10, 20 or 30 years. If you die during that time frame, your loved ones receive the death benefit.

The cost of the premium doesn't change during the time period you select. Nor do the benefits (as long as you make the required premium payments). And the earlier you buy, typically the lower the premiums.

Many term life contracts also offer another advantage. It's called a conversion privilege, and it allows you to choose to convert part or all of your coverage into permanent life insurance.

As the name suggests, this is insurance that will cover you for your entire life. Your beneficiaries receive the death benefit no matter when you pass on. And like term life, you can lock in a set premium for a time determined by the contract.

Permanent life insurance also offers an added benefit. It's called cash value. You can build up income-tax free value throughout the time specified in the contract. That can potentially provide access to cash should you or your family need it.

There are many types of permanent life insurance. Whole life provides a guaranteed death benefit, premium amount and cash value growth. Another type is universal life insurance. It provides flexibility that may allow you to make numerous changes, such as increasing or decreasing the death benefit or adjusting premium payments while the contract is in force.

So how do you decide which type of life insurance is best? There are a range of factors to consider. Your Thrivent Financial representative can help you determine which form will best fit your family's long-term financial strategy.

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