Life Insurance Overview
Whole Life Insurance
- This is a lifelong permanent insurance which builds a cash value, giving you the possibility of a “savings account” that grows for when you need it.
- Provides life insurance death protection as long as you live.
- Unlike universal life, whole life has non-forfeiture values which means that you may stop paying premiums and withdraw the cash value from your policy, or you may elect to keep the policy with a much smaller amount of death benefit, or keep the same amount of death benefit for a short period of time.
- Either way, you have the option to reduce or stop paying premiums.
Term Life Insurance
- Term insurance is a temporary life insurance that provides coverage for a certain period of time.
- Term insurance provides the largest immediate death benefit protection for your premium dollars.
- Term life policies are currently available for 1, 5, 10, 15, 20, 25 and 30 year terms. Premiums are usually guaranteed for the entire term.
- Some term insurance policies are “renewable” for one or more additional terms even if your health changes. Each time you renew the policy for a new term, premiums will be higher because of your older age.
- Some term insurance policies are “convertible.” This means that before the end of the policy period, you many trade the term policy for a permanent policy even if you are in bad health.
Universal Life Insurance
- A mixture between Term and Whole life, Universal Life can be life long if you choose.
- It is a unique way to protect your family while accumulating cash value. The life insurance cash value can replace lost income if you are unable to work, pay off children’s education, pay off a house mortgage or even supplement retirement.
- The death benefit of universal life is guaranteed and the premium is flexible. You may pay more or less into the policy subject to certain guidelines. If you pay more into the policy you will accumulate more cash value, you may pay less into the policy if you prefer to have a lower premium and accumulate less cash value.
- The insurance company pays a current interest rate which is adjusted up or down, but has a guaranteed pre-determined interest rate percentage. The accumulated cash value is determined by the interest credited to your policy along with other policy variables. Newer policies may be paid-up in a limited number of years and some are guaranteed to your age 120.