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What is Term, Universal & Whole Life Insurance
Term life insurance is the lowest priced life insurance coverage on
the market. Term life insurance offers the best life insurance value
available by providing the largest amount of coverage with the least
premium dollars. In comparison to permanent life insurance products
(universal or whole life) term life allows you to save money on life
insurance and invest the savings in a higher yielding investment.
Term life insurance provides coverage for a specified period of time,
which usually ranges from 5-30 years depending on your need for
coverage. The most common periods of death benefit protection purchased,
and therefore the most competitively priced, are 10, 15, 20 and 30 year
plans.
A death benefit (coverage amount) is determined when the policy is
applied for, and the beneficiary receives the death benefit if the
insured individual dies while the policy is in-force.
Premiums on a guaranteed level term policy remain level for the duration
of the policy. A non-guaranteed policy's premiums will typically remain
level for a pre-disclosed period of time and then increase after that.
There are usually various options available on most term life insurance
policies, including child riders, accelerated benefits riders, and
convertibility options to permanent insurance coverage.
Term life policies are designed to meet a specific need for a stated
period of time. Term life insurance can be especially useful for anyone
who has a financial liability that must be insured (like the purchase of
a home).
What is Universal Life
Insurance?
Universal Life is permanent insurance with flexibility. Premiums are
flexible and cash values vary based upon actual interest earned,
mortality expenses incurred and expense charges imposed by the insurance
company. Because of its flexibility, a Universal Life policy can be
designed to look like:
- a whole life policy with high cash values and guaranteed death
benefit,
- a policy with much lower premiums and cash values with a
death benefit guaranteed to age 100 or
- a policy specially designed to meet your unique needs
What is Whole Life Insurance?
Whole life is permanent insurance that is guaranteed to last for your
entire life. It provides a death benefit and also builds cash values
that can be borrowed and used during your lifetime. These cash values
are accumulated on a tax deferred basis.
The cash value is an asset, just as your home, your savings
account or your mutual fund account is an asset. It can be used to help
with college costs, to help purchase a new home, or to supplement your
retirement
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