The Benefits of Permanent Life Insurance

While the reasons people have life insurance change throughout their life, many find they continue to have a need for it until the day they die. Life insurance can play a critical role in helping individuals, families and businesses reach their financial goals and dreams.

The Benefits
A traditional permanent life insurance policy can provide a number of benefits:

  • Life-long insurance protection.
  • Guaranteed level premiums, death benefit and cash value for life.
  • Non-guaranteed dividends and/or cash value beyond the guaranteed values may be used to increase the policy's face amount, taken as cash, or used to offset part or all of the premium payment.
  • Cash values increase annually on a tax-deferred basis and can be accessed during the insured's lifetime to help reach a number of financial goals, such as providing for a child's education, boosting retirement income or having a financial emergency fund.1
  • Option to elect a "paid-up" policy (with a reduced level of protection) which requires no further premium payments.
  • Policy can be surrendered for its accumulated cash value.2

Clearly, no other financial product can do what permanent life insurance does: Immediately provide cash in the event of the insured's death and be a source of cash while the insured lives. While no insurance or financial product is the one and only answer for everyone, depending on your circumstances, permanent life insurance can be an important financial tool to help you achieve financial security.

Permanent vs. Term
Critics of permanent life insurance say it's always better — and cheaper — to buy only term insurance (with no cash value) and invest the premium savings elsewhere. The premise being that, for the same out of pocket cost, you would be better off purchasing a term policy and a separate investment (made up of the premiums saved by purchasing a term policy) than you would using the same money toward the purchase of a permanent, cash value policy. Term insurance may be an appropriate choice for some people. However, it should not be purchased based on cost alone or the blanket recommendation to "buy term and invest the difference." Following this advice usually leaves people vulnerable to a gap in their financial program.

According to the Money Maladies study conducted by Harris Interactive, people who bought term life insurance with the intention of investing the premium savings elsewhere admit they are not following through. In fact, only 14% of those only owning term insurance invest all the money they saved.3

Take Control of Your Life
The decision of how much and what kind of insurance to buy can be difficult. It is a personal decision too important to rely on a "one-size-fits-all" recommendation. Meeting with a financial representative can help answer any questions and remove any reasons for putting off such an important decision.

1 Taking money out of a policy through loans and/or partial surrenders will reduce the death benefit.

2 There may be potential income tax consequences.

3 Money Maladies Studies, Northwestern Mutual 2001-2004
Brad Alderfer : Northwestern Mutual
1000 Elm St Fl 12 • Manchester, NH • 03101-1730
Phone: 603-206-6025
www.bradalderfer.com

© 2010 Northwestern Mutual Wealth Management Company, Milwaukee, WI. All rights reserved. 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 - (414) 271-1444.

Before you agree to receive financial planning services, please see complete information and disclosures in The Disclosure Brochure and review the terms of the Northwestern Mutual Wealth Management Company Planning Engagement Agreement. These may be obtained from your Wealth Management Advisor.

Northwestern Mutual Financial Network is the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM), and its subsidiaries and affiliates. R Bradley Alderfer is a Representative of Northwestern Mutual Wealth Management Company®, Milwaukee, WI (WMC), a wholly-owned company of NM and limited purpose federal savings bank. WMC is not a broker-dealer or insurance company. All WMC products and services are offered only by properly credentialed Representatives who operate from agency offices of WMC. Representative is an Insurance Agent of NM (life insurance, annuities and disability income insurance), and Northwestern Long Term Care Insurance Company (NLTC), a subsidiary of NM (long-term care insurance), and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS), 1000 Elm St Fl 12, Manchester, NH 03101-1730, 603-627-7608, a wholly-owned company of NM, registered investment adviser, broker-dealer and member FINRA (www.finra.org) and SIPC (www.sipc.org). Representative may also be an Investment Adviser Representative of NMIS. NM and The Northern New England Financial Group are not broker-dealers, registered investment advisers or federal savings banks. There may be instances when this agent represents insurance companies in addition to NM or its affiliates.

Investment products are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, NMWMC or its affiliates and are subject to investment risks, including possible loss of the principal amount invested.

The products and services referenced are offered and sold only by appropriately appointed and licensed entities and Network Representatives. Network Representatives and their staff might not represent all entities shown or provide all the services discussed on this Web site. Not all products and services are available in all states.

R Bradley Alderfer is primarily licensed in New Hampshire and may be licensed in other states.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP, Certified Financial Planner and CFP (with flame logo)®, which it awards to individuals who successfully complete initial and ongoing certification requirements.