Answer
Pros:
- Predictable, in most cases premiums are fixed for the life of the insured.
- The beneficiaries receive the death benefit no matter when the insured dies, as long as premiums were paid.
- The policy may build up cash value, which grows tax deferred.
- If you surrender the policy at a later date, the cash value, if any, will be returned to you.
- If you stop making premium payments you can receive the cash value or use that cash value to provide a paid up insurance benefit. The company must provide either extended term insurance coverage or reduced paid paid-up coverage. While it is not required that both options be offered many companies do make both available.
- Cons:
- A more complex product than term life insurance.
- Higher premiums than term life insurance.
- Could be costly if coverage lapses early.
