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Life insurance basics

Term and Permanent

Life Insurance

Life insurance is very similar to renting or owning a home with these factors weighing the decision.


Single or married with kids

Short term and long range plans

Current and future financial situation

General rules at different stages of life

Starting out career = 100% Term insurance

Married with kids = 20% Permanent + 80% Term Insurance

Retirement = 100% Permanent Insurance

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"The best life insurance policy is the one that is in place when your family needs it."

How Permanent Insurance Works

Similar to how a home mortgage works...

  • One-third of your payment goes to owning your insurance coverage.

  • Two-thirds of the premium is credited to the equity=cash value.

  • Cash value grows from accumulated interests.

  • The cash value can be accessed at any time and age through withdrawals or low interest loans.

  • At death: 

Life insurance benefit + Cash Value = Full tax free death benefit


"The purpose of life insurance is to create cash"
Ben Feldman

Cash Value Attributes of Permanent Life Insurance

Cash value attributes

  • withdrawal with deferred taxes

  • tax free low interest policy loans 

  • loans do not have to be paid back

  • no age limitations

  • cash value and death benefits are tax free

"Life insurance turns pennies into dollars"

How much protection do I need?

10x Annual income for life insurance

5x  Annual income for a severe short term or long term illness

PNG How much life insurance do I