To plan for the future means to make certain commitments today. Life insurance is a crucial element of family planning because it ensures the financial security of the beneficiaries after the policyholder's death.
A life insurance policy provides you and your family with peace of mind. After all, it's nice to know that your loved ones are protected and can benefit from the fruits of your labor so they can invest in their own future.
We also consult on the following life insurance policies
- Term Life Insurance
- Permanent life Insurance, including:
- Whole life and Universal life
- Variable life Insurance
For more information, please contact our life insurance specialist
Term Life Insurance
Term life gives you coverage for a set period of time—usually while you have dependents relying on your income.
- Term life insurance lasts a set amount of time. Policies are usually sold in 10, 20, or 30-year terms.
- You’ll make monthly or annual payments, called “premiums,” to keep the policy in force.
- If you die while the policy is in force, a pre-set cash payment called a “death benefit” will be paid out to whomever you name as a beneficiary. The bigger you want this payment to be, the more your premiums will cost.
- At the end of the term, the policy expires and is no longer in effect.
When you get a term life insurance quote, you should determine how much coverage your family will need. Typically, customers get term life insurance to cover:
- Lost income
- Mortgage payments
- Children's college tuition
- Other debts that have specific end dates such as a car loan or business loan
- Funeral or any other expenses your family may have
Ideally, you want to lock into the maximum years you need instead of relying on the renewal option. For those term policy holders that decide down the road they want to keep their life insurance, most term policies come with a conversion option.
The conversion option will change a term policy into a whole life or universal life policy. The premium will increase but the rate class is based on the rate class you originally qualified for the term policy at and not based on your current health status.
This is a huge benefit for someone who has a term policy that comes down with an illness and cannot get a new policy or additional life insurance. Simply convert the term policy to a universal life or whole life policy and keep the insurance for the remainder of your life.
Permanent Types of Life Insurance
There are four main permanent life insurance types: Whole Life, Universal Life, Indexed Universal Life and Variable Universal Life.
Whole Life Insurance
Whole life insurance covers you for your entire life. It’s a more complicated product that, if you live to an old age, eventually gives your family back the money you’ve put in.
- Whole life insurance will pay out a set amount of money to your beneficiaries when you die, called a “death benefit.” The bigger the sum, the more expensive the policy will be.
- You’ll pay monthly or annual premiums to keep the policy in force and it will remain active your whole life, as long as you keep paying the premiums.
- Each month, a certain amount of your premium will go toward the policy’s savings component, called the “cash value.” The insurance portion of the death benefit gradually shrinks as the cash value grows, until eventually the cash value makes up 100% of the money the insurance policy will pay out.
- You’ll earn a small amount of interest on the cash value, predetermined by the insurer.Your cash value and death benefit can never decrease in value unless you start withdrawing the cash value from the policy, or unless you stop paying your premiums. In this way, your whole life policy is akin to a savings account: When you pay your premium, part of the money goes toward the insurance costs, while the rest goes towards increasing your cash value. This cash value earns interest, which is guaranteed by the insurance company, as is the death benefit. The guarantee is as strong as the company that holds your policy, so financial stability is a key element in choosing an insurance company.
- When you put money into your 401k or traditional IRA,you are only deferring taxes, as you pay taxes on all of the money when you withdraw it during retirement. With a whole life insurance policy, you pay the premiums with after-tax dollars. The cash value grows without You would only be taxed if your withdrawals from the policy exceed what you put into it, and you have the ability to remove gains tax-free by taking a loan off the policy.
- The whole life policy pays a dividend. The key thing here, again, is that these dividends aren’t taxed, but are considered returns of premium. So, if at the end of the year the insurance company pays out $1,000 in dividends on your policy, you don’t pay taxes on that money. You can take that money in the form of a check, reinvest it in the cash value of the policy, or use the dollars to purchase additional, paid-up insurance. Those dollars will buy more life insurance, provide a bigger death benefit, and earn interest.
Universal Life Insurance
Universal life insurance is type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value buildup. The death benefit, savings component and premiums can be reviewed and altered as a policyholder's circumstances change. Unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his accumulated savings to help pay premiums over time. A Universal Life Insurance policy is a flexible way to help protect your loved ones and build tax-deferred cash value.
Uses for Universal Life Insurance
- Provides for a family's loss of income, mortgage costs, and educational needs
- Access to cash value for life's opportunities
- Estate, special needs, and business planning
- Flexibility — You decide the amount of life insurance and premium payments subject to policy minimums.
- Death benefit — Life insurance proceeds are generally income tax free to the beneficiary.
- The growth in cash value is tax-deferred under current federal income tax law.
- Access to cash value — the cash value can be accessed to help with education expenses, provide a retirement supplement, or other personal objectives.
Index universal life insurance:
Index universal life insurance offers flexible insurance premiums combined with an index account. The index account provides the potential for earnings based on an index.
Group universal life insurance:
Universal life insurance provided through employers for a number of individuals.
Variable universal life insurance:
Inclusive variable universal life insurance that allows for the cash-value portion of your policy to be invested.
Depending on the policy you choose, your policy’s death benefit can stay the same, or increase or decrease over time. While universal life policies typically do not provide the same guarantees as whole life insurance, their flexibility makes them an ideal planning tool.
We work hard to get you the best Life Insurance policy you deserve. You can contact us by Phone or E-mail.