Life insurance may be one of the most important purchases you’ll ever make. In the event of a tragedy, life insurance proceeds can help pay the bills, continue a family business, finance future needs like your children’s education or even protect your spouse’s retirement plans. There are several types of life insurance. How much you need and what type is right for you depends on your needs and circumstances.
Term life insurance provides coverage for a specified amount of time, or a term. The length of your policy’s term depends on the life insurance product you select. i.e. 10, 15, 20 or 30 years.
Is term life insurance right for you? You may want to consider the following things before purchasing term insurance.
- The death benefit for a term life insurance policy is only paid if you die during the term of coverage.
- It generally only provides a death benefit and has no cash value.
- Term insurance is usually the least expensive life insurance.
- Generally, you can covert term insurance to permanent insurance with proof of insurability.
- Term insurance solves a temporary need, such as mortgages and college tuition.
- Term insurance is also less expensive
- Term insurance policies do not accumulate cash value
Cash Value Term
Our Cash Value Term (CVT) insurance policy is structured similarly to our traditional 20- and 30-year level term products, with three main differences:
- The guaranteed premium during the specified period falls in between our traditional level term and whole life plans.
- The yearly renewable term premiums to age 95 following the specified level period are 65% to 70% less than those in the traditional term plans.
- CVT accumulates cash value that can be surrendered for cash, applied to purchase paid-up term to 95 or applied as a single premium toward the purchase of a single premium whole life (SPWL) plan. Cash Value Term fills a niche between whole life and traditional level term. CVT costs less than whole life insurance, while providing better, more affordable options for maintaining coverage beyond the specified period and cash surrender values when coverage is no longer needed than traditional level term.
Whole Life Insurance
Whole life insurance does not end after a specified term. As long as you pay the premiums, your beneficiary will receive a death benefit when you die. Unlike most term insurance policies, a whole life insurance policy builds cash value accumulation. It can be initially more expensive than term life.
Whole life insurance has advantages and disadvantages.
- Builds cash value
- Level premium payments
- Option for a reduced paid up policy
- You may not decrease your premium payments
- Your premium frequency is not flexible
- You cannot increase your death benefit
Universal Life Insurance
Life insurance is an important part of your financial plan and can help you protect your family and business by providing a death benefit to your beneficiaries. Universal life insurance can provide life insurance protection, flexible premiums, cash accumulation and the ability to customize the policy to fit your needs.
Universal life insurance can provide affordable protection for your family or business. The death benefit is payable to beneficiaries tax free to help meet the needs of those you leave behind.
Flexible Premium Payment
As a flexible premium policy, you can pay less premiums when money is tight, and more when you want to increase the policy’s cash value or increase the death benefit.
Universal life policies can build cash value on a tax-deferred basis so your money can work for you over the long term. You can use the funds to pay for college expenses or to supplement your retirement income. Withdrawals and loans will reduce available death benefit and policy value.
Withdrawals beyond basis may be taxable income. Excessive and unpaid loans will reduce death benefits and policy value and may cause the policy to lapse.