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I’ve been accused of recommending term life for every need and while I maintain that 95% of all needs for the average person are well served by term, there are valid reasons to consider permanent insurance in your portfolio.

Before any jumps on that statement and thinks I’ve change my mind about whole life, I haven’t. Whole life is still the wrong choice for permanent in my often argued with opinion. Why would anyone tied up excess cash when it buys less insurance and doesn’t have a better guarantee? Again, for those reasons I am about to concede are permanent, use a universal life with a no lapse guarantee. No whole life. No traditional universal life. No variable universal life.

Let’s start simple. Personally I think that a small final expense life insurance policy is a valid need and a valid use for permanent coverage. Simply put, unless you have, say, $25,000 lying around in your checking or savings account for the express purpose of taking care of final expenses such as medical bills, burial and legal fees for finalizing your estate, a $25,000 life insurance policy makes a lot of sense.

Since I mentioned finalizing estates, a policy for estate tax purposes is certainly not something that you would want to tackle with term insurance. With the rare exception of the recession we are currently experiencing, estates that are large enough to be taxed tend to continue to increase in value and never get to the point where term is the answer, a need that resolves itself with time.

Charitable giving is not a temporary need. A policy to leave a specified inheritance to grandchildren is not a temporary need.

Bottom line. Having admitted that there are permanent insurance needs, let me be very clear. The fact that a UL with a no lapse guarantee is the best product, whether an individual or second to die insurance, is without question. The fact that the product as we know it and love it is changing as we speak should be a concern to anyone considering adding or considering replacing a permanent product in your portfolio. What one of us has missed a chance to lock in a mortgage interest rate and over the ensuing years paid thousands or ten of thousands more than we needed to. Don’t make the same mistake with life insurance. It won’t come around again.