The foundation of a financial plan
By Tim Harmsworth Part 2

The basis of building a solid financial foundation begins with an initial assessment and a lot of "big picture" planning, but there are other key components to a solid financial plan, such as Life Insurance. One of the oldest and easiest financial products to understand, Life Insurance is largely overlooked as a financial planning tool. There are a number of different types of policies available.

Term Insurance provides fixed benefits for a fixed period of time for a fixed payment. Term insurance is the purest form of life insurance protection, which provides a maximum amount of protection for a temporary period of time, most commonly ten years. It is very useful to cover a specific debt for a specific time such as a mortgage, or, when cash flow doesn't

permit permanent life insurance. Term insurance is a more affordable, basic level of coverage that can be converted to permanent insurance when cash flow permits.

A Universal Life plan is a blend of life insurance protection and investment accounts. Part of the premiums you pay goes towards insurance, the rest comprises the investment component. The growth

within the investment component is tax-deferred, subject to certain limits. At death, your beneficiaries would receive not only the face value of the policy's life insurance, but also the accumulated value of the investments. All funds may be paid to the beneficiary on a tax-free basis. Universal life is best suited to those who have additional capital above and beyond a basic investment plan.

We all have dreams, wishes and responsibilities. Life Insurance is an effective way to ensure that our goals are achieved and our family is secure in the event of an untimely passing.

We would be pleased to help you with any questions you may have regarding this information. Just contact Jim Harmsworth, Financial Planner, 431-5566, or drop into the Stroud branch of Peoples Credit Union.