Life Insurance

What is Term Life?

Term life insurance covers your client for a period of time that is selected (for example, 10 or 20 years) and pays benefits only upon the death of the client during the time of coverage. Term life insurance is a basic and simple form of life insurance, and it is often referred to as temporary insurance. Basic term life insurance policies do not accumulate cash value, which means if the client does not pass away within the time frame for which he or she is covered, the client’s estate does not collect any money from the policy when it ends. However, if the client does pass away during the term period, the value of the policy will be awarded to his or her estate.

Most people buy term life insurance to replace income that would be lost if a wage earner were to pass away. Term life insurance proceeds are tax-free, and they can play a role in estate planning, cash accumulation, retirement funding, and the transfer of wealth to beneficiaries. A basic term life insurance policy is one of the most affordable policies on the market today and proceeds are not taxable to beneficiaries. Are you wondering how much life insurance coverage is needed? Your client’s life insurance needs may vary depending on his or her particular stage in life. This means that an unmarried person who doesn’t own a home may not need as much life insurance as someone who is married with children. As none of us want to leave financial trouble for our loved ones, it is important to remember to always help your clients evaluate what amount of coverage they need to make sure their dependents can continue to live the lifestyle they are accustomed to. As always, we are ready and available to assist you.

Five Facts about Term Life Insurance

Getting Term coverage is easy
Term coverage is for a limited period of time
Term life is a good planning tool
Term policy is very affordable
You can also get your term premiums back

Differences between Term and Whole life insurance

Term is only for a period and has death benefits whole life is for life
Term only pays if your clients die within the term benefits
Term life “terms” can be different 5, 10, 15, or 30 years
Whole life your client usually need to qualify a health examination
Whole life takes over 12 years to build up a decent cash value

What is Universal life insurance?

Universal life insurance was created to provide more flexibility than whole life insurance by allowing the policy owner to shift money between the insurance and savings components of the policy. Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing the policy owner to make adjustments based on his or her individual circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly.

Along with providing a death benefit, universal life insurance also incorporates a savings vehicle. In short, it is like combining a term life insurance policy with a tax-deferred interest accumulating savings account. One benefit of purchasing a universal life insurance policy is that besides accumulating a tax-deferred savings, one may not have to pay premiums during the entire policy. If money to pay the death benefit and other related costs accumulates in the tax-deferred savings portion of the policy, then premiums may eventually not be required to keep the policy in force.

What does universal life insurance offer?

Often more affordable premiums than whole life insurance
Ability to set the guaranteed number of years you want the policy or set for an entire lifetime
Options that usually have additional money that can be set aside for long-term financial goals
Universal life also has cash value options that can help lower your premium