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If my agent recommends a cash value policy, What should I consider? |
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If you expect to have a continuing need for at least some life insurance throughout your life, you may want to consider a cash value policy. Alternatively, you could get a mix of cash value insurance and term insurance. This would allow you to get basic continuing coverage (cash value) together with low cost insurance (term) to meet high coverage needs for income and large debts such as a mortgage. If you are likely to discontinue the policy in a few years (more than half are dropped in less than 10 years) you should reconsider. The expenses associated with the initial years of the policy (marketing and underwriting and commissions) usually mean that a cash value policy held for only a few years can be a very expensive way of getting short term coverage.
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