Cash Life vs. Term Life Insurance Policies

Term life insurance protects those you love. It can reduce financial anxiety now and in the future, and provide for your loved ones in the event of your death.

It's a small, but worthwhile expense to include in your monthly budget. Today, a life insurance policy can provide you and your family peace of mind, and you might worry less about how your loved ones will pay for something when you're gone.

And when the inevitable time comes, a life insurance policy could provide your family with an income, help them reach specific financial goals (like funding a portion of your child's college education), help cover medical and funeral expenses, or help settle taxes and debt after you die.

There are two basic types of life insurance:

Cash value life insurance policies generally have higher premiums than term life insurance. The company invests the portion of the premium that is not used for the cost of insurance, which builds cash value that you could use during the life of the policy. For example, you could borrow against the cash value through a policy loan, but if you do not repay the loan and the interest, the amount you owe will be subtracted from the proceeds when you die. You could also apply the cash value to your renewal premiums. However, in order for the cash value to build, you have to pay higher premiums. As with any investment, there are risks that the cash value will not increase as you had planned.

Term life insurance policies generally have lower premiums, but they do not build cash value. A term life policy covers you for a specific time (ex. 1 year, 10 years, or 20 years), and will pay the death benefit to your beneficiary if you die in that term. Although term life insurance doesn't build cash value, the money you could save in premiums by choosing term life insurance over a cash value policy could be saved or invested by you rather than an insurance company, suggests the Money Pros at New York Daily News.

Did you know you can find affordable term life insurance at the same place you can buy auto insurance? With Direct, you could get up to $25,000 of term life insurance coverage for less than 75 cents a day, or up to $15,000 of coverage for less than 50 cents a day.*

How much change do you have at the bottom of your purse? Under your couch cushions? In your car? Spend it on something that will benefit your family. Life insurance is one more way you can invest in their future, reduce their financial anxiety, and comfort them when you're gone. Start your free quote or call a Direct agent at 1-877-463-4732 to see just how affordable term life insurance with Direct could be.

*Policies underwritten by Direct General Life Insurance Company-Policy #58TL02010713. Daily premium based on annual policy for insured ages 18-50. Not available in all states. Life premium terms vary by state, insured's age, and the selected coverage.

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