Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value. Term life insurance means that the insurance benefit is payable only if the insured dies during a specified period. The beneficiary receives the benefit payment if the insured dies while covered under the policy. Term insurance is initially cheaper than other types of policies that offer the same amount of protection. Therefore, it gives you the greatest immediate coverage per dollar.

Term insurance has no buildup of cash value as some other types of insurance allow. Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income. Term insurance covers you and pays your designated beneficiary in the event of your death or certain other catastrophic events. It is not an investment policy; it has no cash value.

Term policies don’t usually build up a cash value, but policies with a return of premium benefit will have a small cash value. Terms and conditions of each annuity contract will vary. Ask the agent and company for an explanation of anything you do not understand. Term insurance provides death protection for a specific period. Death benefits are paid only if you die within that period.

Dividend accumulations may be applied to premiums, or remain in the “custody” of the insurance company for the purpose of accumulating interest. Dividend accumulations which are not used to pay a premium are treated the same as money in a savings account. Dividends are not guaranteed to be paid to you. Dividends could be used to purchase additional insurance, pay premiums, or just accumulate with interest. Note that there is no guarantee that you will actually receive a dividend.

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