Purchasing a life insurance policy is an investment many people evaluate during the estate planning process. In the event of one’s death, a life insurance policy is a safety net that ensures their loved one’s future financial obligations will be met, covering items such as funeral costs, outstanding debt, estate taxes and everyday living expenses. It can also help alleviate the extra child care and other domestic expenses that can occur if a stay-at-home parent should pass away.

There are two basic types of life insurance: term life insurance and permanent life insurance. The type of life insurance policy that best suits you will depend on your unique needs.

Option #1: Term Life Insurance

Just as its name implies, term life insurance covers you for a specific period of time, or term, that you choose. Since it offers a death benefit but no cash value, term life insurance is an inexpensive way to protect your beneficiaries for a specified period of time. Term life insurance is best suited for:

• People who have a temporary need for life insurance protection
• Individuals who need a large amount of insurance protection but have limited cash
• Those with specific business needs, such as additional coverage for a key employee

At the option of the policyholder, and without evidence of insurability, term life insurance can be renewed at the end of the term for a limited number of successive terms. It can also be converted or exchanged for a permanent insurance policy without evidence of insurability down the road.

Once the term expires, coverage ceases and the policy has no further value. It’s important to note that rates generally increase along with the insured’s age.

Option #2: Permanent Life Insurance

Permanent life insurance is any form of life insurance other than term. Examples are whole life, universal life and variable life. These policies combine term life insurance with a long-term, tax-sheltered savings plan.

• Those who have a lifetime need for insurance protection
• Individuals who prefer stable premiums over the life of the policy
• People who want a policy that allows them to build tax-deferred values
• Those who value the high degree of coverage the policy affords

While rates for a whole life insurance policy remain stable of the life of the policy, premiums are initially more costly than those of term insurance policies.

For additional information and to discover which type of life insurance may make the most sense for you, visit www.lifehappens.org, a non-profit organization focusing on life insurance education.

Securities and investment advisory services are offered solely through Ameritas Investment Corp. (AIC). Member FINRA/SIPC. AIC and The Summit Group of Virginia LLP are not affiliated. Additional products and services may be available through Summit Group of Virginia LLP that are not offered through AIC. Representatives of AIC do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.