Life Insurance Planning
Protect today. Build for tomorrow.
Life insurance is primarily designed to protect the people and financial responsibilities that depend on you. Certain permanent life insurance policies may also build cash value over time, creating an additional financial resource that can play a role in a broader financial plan.
Protect
Protect what depends on you.
Life insurance can help provide financial resources to the people or organizations that depend on you if you are no longer there. It may help address needs such as:
- Replacing income
- Supporting a spouse or children
- Paying a mortgage or other debts
- Funding education
- Protecting a business
- Creating a legacy
- Providing estate liquidity
What would financially change if you weren't here?
Term vs. Permanent
Not all life insurance works the same way.
Term Life Insurance
Temporary protection
Generally designed to provide protection for a specific period of time.
- Coverage for a defined period
- Generally lower initial premium
- Primarily death-benefit focused
- Usually little or no cash value
Possible uses
- Income replacement
- Mortgage protection
- Family protection during working years
- Temporary financial obligations
Permanent Life Insurance
Long-term or lifelong protection
Generally designed to provide coverage that can remain in force for life, assuming policy requirements are met.
- Potential lifelong coverage
- Higher premium commitment
- May accumulate cash value
- May provide additional financial flexibility
Possible uses
- Lifelong family protection
- Estate planning
- Business planning
- Legacy planning
- Long-term financial strategies
Neither category is automatically better. The right structure depends on the problem being solved.
Build
Some permanent life insurance can build value while you are living.
Certain permanent policies may accumulate cash value over time. That means the policy may have two forms of value:
Death Benefit
Primarily designed to provide money to beneficiaries.
Cash Value
A financial value that may accumulate inside the policy and may be available to the policy owner during life.
This does not make life insurance identical to an investment account. Its structure, guarantees, costs, risks, taxation, access rules, and objectives are different. Cash-value life insurance may serve a specific role as part of a larger financial strategy — but it should not be viewed as a replacement for retirement accounts or investment portfolios.
The policy should fit the plan. The plan should not be built around the policy.
Access
Financial value can matter because of the flexibility it may provide.
Depending on the policy, cash value may sometimes be accessed through policy loans, withdrawals, or other policy-specific methods. Access is subject to policy terms and may affect:
- Cash value
- Death benefit
- Policy performance
- Loan interest
- Tax considerations
- Policy sustainability
Policy loans are not free money. Borrowing from a policy has real consequences — including interest charges, potential reductions in the death benefit, and possible effects on the policy's long-term sustainability. Access should be evaluated carefully within the context of the overall financial plan.
Protect.
Provide financial resources for the people or obligations that depend on you.
Build.
Certain permanent policies may accumulate cash value over time.
Access.
Depending on the policy, that value may provide additional financial flexibility during life.
Protection comes first. Additional financial utility may come second.
When it may apply
Life insurance can solve different financial problems at different stages of life.
It may be worth exploring for needs such as:
- Family protection
- Long-term death-benefit needs
- Estate or legacy planning
- Business protection
- Buy-sell planning
- Key-person protection
- Business succession
- Long-term financial flexibility
Whether permanent life insurance makes sense depends on the person's goals, financial situation, existing assets, tax circumstances, time horizon, and other available strategies. Tax and legal consequences depend on individual circumstances and should be reviewed with the appropriate tax or legal professional.
Start here
The first question is not, "Which policy should I buy?"
The first question is: What financial problem are we trying to solve?
From there, the appropriate type and amount of life insurance can be considered. Possible questions include:
- —Who am I protecting?
- —How much protection is needed?
- —How long is it needed?
- —Is the need temporary or permanent?
- —Does cash value have a useful role in the plan?
- —How does this fit with my savings, investments, retirement accounts, and other financial resources?
Start with the problem. Then choose the tool.
Life insurance should support the plan, not become the plan.
The right solution begins with understanding what you are trying to accomplish.
Life insurance products involve risks and are subject to policy terms, conditions, and fees. Cash value accumulation and policy loans are not guaranteed and depend on policy type, performance, and design. Tax and legal consequences vary by individual circumstances and should be reviewed with a qualified tax or legal professional. This page is for educational purposes only and does not constitute financial, tax, or legal advice.
Related reading
Disability Insurance
Income protection that keeps your financial plan funded when you cannot work.
What Happens If the Plan Goes Wrong
Why resilience is as important as growth in a well-built financial plan.
One Day You'll Earn Your Last Paycheck
Building the income sources that outlast your working years.