Life

Types of Life Insurance

Life insurance protection comes in many forms, and not all policies are created equal. While the death benefit amounts may be the same, the costs, structure, durations, vary across the types of policies.

Whole Life Insurance

This provides guaranteed insurance protection for the entire life of the insured, otherwise known as permanent coverage. These policies carry a “cash value” component that grows tax deferred at a contractually guaranteed amount, usually a low interest rate, until the contract is surrendered. The premiums are usually level for the life of the insured and the death benefit is guaranteed for the insured’s lifetime. With whole life payments, part of your premium is applied toward the insurance portion of your policy, another part of your premium goes toward administrative expenses and the balance of your premium goes toward the investment, or cash, portion of your policy. Your basis is the amount of premiums you have paid into the policy minus any prior dividends paid or previous withdrawals.

Universal Life Insurance

This is also known as flexible premium or adjustable life, is a variation of whole life insurance. Like whole life, it is also a permanent policy providing cash value benefits based on current interest rates. The feature that distinguishes this policy from whole life is that the premiums, cash values and level amount of protection can each be adjusted up or down during the contract term as the insured’s needs change.

Variable Life Insurance

This is designed to combine the traditional protection and savings features of whole life insurance with the growth potential of investment funds. This type of policy is comprised of two distinct components: the general account and the separate account. The general account is the reserve or liability account of the insurance provider, and is not allocated to the individual policy. The separate account is comprised of various investment funds within the insurance company’s portfolio, such as an equity fund, a money market fund, a bond fund, or some combination of these.

Term Life Insurance

This is one of the most common policies. Term insurance can help protect your beneficiaries against financial loss resulting from your death; it pays the face amount of the policy, but only provides protection for a definite, but limited, amount of time. Term policies do not build cash values and the maximum term period is usually 30 years. Term policies are useful when there is a limited time needed for protection and when the dollars available for coverage are limited. The premiums for these types of policies are significantly lower than the costs for whole life.

No matter what policy you have, or are looking to get, make sure to contact us with any questions that you might have.

Why Having Multiple Policies May Be Needed

Life insurance is a wonderful tool that spares your loved ones some of the pain of losing your income and support. But as with insurance options, the terminology can be confusing to many people. Complicating matters, life insurance comes in two basic forms that have many different names and different degrees of coverage. The question most people ask is whether they need term life or whole life.

The most basic definitions are the simplest: term life lasts for a specified term of your life; whole life lasts for the rest of your life. In both policies, your beneficiaries receive your death benefit when you die. The main differences lie in the duration of the two forms of life insurance and some of the built-in features available.

But term life is generally aimed at younger consumers, and often those customers outgrow their term life policies. If you buy a policy at 25 and name your parents and your spouse as beneficiaries, you can later change the policy to include future children, but the overall terms will remain the same, your designated beneficiaries would end up with fewer benefits from your life insurance policy. Consequently, some term life policies allow you to switch to whole life down the road.

Term life comes in two basic forms: level term life and decreasing term life. Level term life is more popular because the death benefit stays the same throughout the policy’s time frame. In decreasing term life policies, the benefit decreases over the course of the policy, most commonly in one-year increments. As with most insurance policies, the premiums you pay are not refunded if you make no claim during the course of the policy

Also known as permanent life insurance, whole life policies pay out death benefits if you die tomorrow or years from now. Whole life also allows you to build equity in the form of a savings account. Whole life insurance is available is three types of policies, each with their own variations.

Having multiple life policies offers consumers more flexibility and more opportunities to save on overall costs. This is possible because multiple policies do not cancel each other out. Rather, they work together to better meet your individual needs. Life insurance is available is so many forms that it can fit your current financial situation and whatever your situation may be in the future. If you have any questions about your current policy or other options, make sure to contact us.

What is Life Insurance?

Understanding your insurance policy is important. If you ever have any questions about your current plan or another plan, make sure to contact us. We can answer any questions and advise you on the options you have for a plan. A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage.

Term Life Insurance

Term life insurance is designed to provide financial protection for a specific period of time, such as 10 or 20 years. With traditional term insurance, the premium payment amount stays the same for the coverage period you select. After that period, policies may offer continued coverage, usually at a substantially higher premium payment rate. Term life insurance is generally less expensive than permanent life insurance.

Universal Life Insurance

Universal life insurance is a type of permanent life insurance designed to provide lifetime coverage. Unlike whole life insurance, universal life insurance policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. Another common use is long term income replacement, where the need extends beyond working years.

Not matter what coverage you have, make sure to contact us with any questions that you might have. This way you know what your coverage will cover for you and your family.

Enjoy The Summer With Proper Insurance

Having the right insurance policies for you and your family are important. There are different insurance needs for different people while in different stages of life. If you are not sure what type of policy you need, make sure to contact us. We can recommend the policies that are best for you, your family, and your possessions.

Homeowner’s/Renter’s

If a fire, tornado, or other disaster damages your home or your possessions, this insurance will cover your house and material belongings. It is a good idea to log your possessions in case you need to make a claim. If you do have homeowner’s insurance, make sure that you have guaranteed replacement cost.

Auto

Liability is insurance that covers anything that you caused in an accident, from damage to the car to the health of the humans on the other end. Another popular type of coverage is collision, which pays for your car if it is damaged or destroyed in a wreck. To save money, you can drop your collision or raise your deductible.

Health

If you do not have health insurance and need to go to the hospital, you will be paying those medical bills for years, maybe even decades. Depending on your health concern, you could be talking about hundreds of thousands of dollars here. Contact us and we can help determine which one best fits you and your family.

Disability

Many companies offer rates on long-term disability insurance to their employees. Some suggest choosing a policy where sixty five percent of your current income is covered and try to buy insurance that pays if you cannot perform the job that is required of you. You will still need to be fed and cared for, but you will not be able to generate an income.

Life

You will need to invest in a life insurance policy. Always go with term life because it is affordable for just about anyone and doesn’t include a bunch of rip-off fees. Plus, you can let the policy expire after you build up your retirement savings rather than being stuck with it forever. Unfortunately, about 39% of adults do not have life insurance. If you are not sure what type of insurance is right for you, make sure to contact us and we can advise you on the policies.

Being Aware Of What Life Insurance Is

A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. Usually, life insurance is chosen based on the needs and goals of the owner. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage.

Term life insurance is designed to provide financial protection for a specific period of time, such as 10 or 20 years. With traditional term insurance, the premium payment amount stays the same for the coverage period you select. After that period, policies may offer continued coverage, usually at a substantially higher premium payment rate. This can provide a safety net for your beneficiaries and can also help ensure the family’s financial goals will still be met.

Universal life insurance is a type of permanent life insurance designed to provide lifetime coverage. Unlike whole life insurance, universal life insurance policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. Additionally, due to its lifetime coverage, universal life typically has higher premium payments than term.

Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Because of the lifetime coverage period, whole life usually has higher premium payments than term life. Whole life can be used as an estate-planning tool to help preserve the wealth you plan to transfer to your beneficiaries. If you have any questions about your insurance plan, or even different plan options, make sure to contact us. We can advise you on the best option for you and your family.