The purpose of this discussion is to review the differences between using term insurance and investing the premium difference in some form of investment, such as savings accounts or mutual funds, and purchasing whole life insurance, which includes both death benefit and accumulation in the same contract.

TERM COVERAGE ONLY

ADVANTAGES                                 DISADVANTAGES

    Cheap to start                                     Temporary coverage

    Easy to understand                              Escalating costs

                                                                Most costly in long run

                                                                Static design

                                                                No tax benefits

ADVANTAGES                                         DISADVANTAGES

    Permanent coverage                                     Higher initial cost

    Tax-deferred build up                                   Yield may be low

    Cash value savings                                         D.B. only paid out

    Permanent protection                                     Somewhat static design

    Loans available

    Tax-favored distribution

ADVANTAGES                                         DISADVANTAGES

Personal control of                                             No one really saves the investment difference

Can suspend the investment                                 Taxes due on side fund

Can control where the funds are invested              Cost of term escalates

Static insusance assumptions                                 Investment risks

An adjustable whole life policy takes the advantages of all the above plans while overcoming their disadvantages. Packaged into one flexible policy, this may be the last you ever need to buy.

1. Flexible premiums - Term, whole life, single pay or even zero premiums! Increase or decrease anytime

2. Flexible death benefit - Increase or decrease anytime One policy you just change thus only one policy fee forever Death benefit plus cash value can be paid out

3. Cash value savings - Tax-deferred compounding in one account High money market yields, or Equity growth in a variable policy

4. Withdrawals of cash value available.

5. Additional deposits to cash value available.

Naturally, there are limits to the extent of adjustment in a life policy. Some contracts are more flexible than others. As you would expect, there are some administrative costs inherent in any contract that permits substantial variations. Policy selection is an area where professional advice is essential - since the contract provisions need to be matched with the needs of the policy owner.