Types of Life Insurance

Term Life Insurance
Term Life insurance provides financial protection for a specified length of time – generally 10, 15, 20 or 30 years. You select the amount you want paid to your beneficiary should you pass away within the term of the policy. This option is often purchased to ensure children can go to college and/or a spouse doesn't lose the house and can pay debts. These are temporary concerns and so a temporary form of life insurance - term life - is best suited to address them.

Premiums, or payments, which can be the same amount or increase with time, must be made monthly, quarterly, semi-annually, or annually. If you die during the term of coverage, the face amount of your policy will be paid to your beneficiaries. Term insurance policies do not accumulate cash value and therefore usually offer lower premiums than other life insurance products with the same face value.

Universal Life Insurance
Universal Life is permanent insurance that has the potential to accumulate cash value. However, it offers additional features and options. For example, you can increase or decrease your policy's face amount to accommodate your changing protection needs. You can also increase or decrease the dollar amount of your premium payments and make additional lump sum payments to your policy. Since a Universal Life policy accrues cash value, you can borrow against this cash value for any purpose.

You have the option to skip premium payments if your account has accrued sufficient value because the premiums will be taken from the accrued value. A Universal Life policy also has the potential to earn a higher rate of return than a whole life policy, although there is a risk that your rate of return could drop.

Whole Life Insurance
Whole Life Insurance is permanent life insurance that you own for your entire lifetime. The amount of the death benefit or face amount can be selected to meet your needs and does not change. Providing income for a widow or widower, funding retirement, or passing wealth to a future generation are reasons for purchasing a whole life policy.

Premiums, or payments, are fixed and can be paid monthly, quarterly, semi-annually, or annually. As more premiums are paid, your policy accumulates a cash value that grows on a tax deferred basis. In essence, whole life is like buying a house versus renting it. The monthly cost is higher than it would be for a term life policy, but with each payment you make, you gain equity. You can borrow against a Whole Life policy for any purpose. Loans, however, require you to pay interest and any borrowed amount you do not pay back is deducted from the payout to your beneficiary at the time of your death.

Schedule a Call Today and let's talk about your needs.