With Term insurance, you are guaranteed coverage for a set period of time, or term, usually for a specific number of years or until a specified age, as long as premiums are paid. Term insurance policies are usually renewable once that time period has expired, although it is likely for premiums to then increase. Since Term provides a death benefit if the insured dies within a defined period of time and does not accumulate cash value, you can generally purchase a higher death benefit for your premium dollars. It is frequently the most affordable coverage. We like to refer to Term Insurance as "renting and permanent Insurance as owning your insurance!"
Life Insurance Product Overview
Feature Term Life Whole Life Traditional Fixed Universal Life Indexed Universal Life
Whole Life insurance offers guaranteed premiums that will not increase or decrease, a guaranteed death benefit plus the guarantee of building cash value within your life insurance policy.* With Whole Life insurance, you do not have to pay current income taxes on the increase of the cash value within the policy and you may be able to potentially access these funds on a tax-advantaged basis.** Whole Life is frequently referred to as “permanent” insurance because unlike Term policies, it remains in force for life, as long as the premiums are paid as scheduled. Also, unlike Term policies, after owning a policy long enough to build cash value, you may take out a loan on the cash value to use however you wish. When you pass away, your beneficiaries will receive the amount of the death benefit, minus any outstanding loans and loan interest that may be due on your policy.
Universal Life and Index Universal Life
Considered the most flexible of the three types of life insurance, Universal Life allows you to
adjust the amount of your policy, also called the face amount, and the premiums you pay.
You also have the potential to build cash value in your policy based on a guaranteed minimum interest rate.* Like Whole Life, you can build cash value in your policy without paying current income taxes on the increases and you can potentially access the funds on a tax-advantaged basis.** Universal Life’s flexibility allows you to stop paying premiums if there is enough accumulated value in your policy to cover the cost of insurance each month. If you desire, you can then pay additional premiums to build back up accumulated cash value. You may also be able to increase or decrease your death benefit depending on your life insurance needs. An increase may require additional underwriting. Two of the most popular types of Universal Life insurance are Fixed Universal Life and Indexed Universal Life. One of the main differences between them is in how the policy’s interest is credited. With a Traditional Fixed Universal Life policy there is an interest rate declared by the company that is credited to the policy’s cash value. Indexed Universal Life credits the interest based on the changes in value of a major market index. Both offer you varying degrees of guarantees and returns, based on your appetite for risk.
* Guarantees are dependent on the claims-paying ability of the issuing insurer.
** Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Policy loans in excess of premiums paid will not be considered taxable income unless the policy lapses. Values withdrawn exceeding the premiums paid into the contract will be treated as taxable income.
The product information above doesn't include the NEW living benefits (ABR) product information. You should make sure to purchase a product with all or some of the accelerated benefits rides (ABR) depending on the state you live in. See the living benefits Life Insurance page for more information!
Q. What product is best for you? A. It depends on many factors. We can help you make the correct decision. Call or click on contact us to schedule an appointment.
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