Life Insurance

For most individuals, especially those with families and who contribute incomes that help maintain the family’s current lifestyle; life insurance is a critical and valuable (but mostly misunderstood) financial tool.  It is the only financial instrument that gives you the immediate leverage it does…imagine, for pennies on the dollar, you can create an instant “estate,” that’s many times larger than the “premium,” for the immediate benefit and protection of your beneficiaries or heirs.  And, it’s one of the few products that actually costs less today than it did 10 years ago.

There are many types of life insurance and many ways for you to acquire coverage.  However, the cold hard facts show that most wage earners are woefully underinsured or are using the wrong type of coverage (hoping to save money) and are actually missing its greatest living benefits (see Money for Your Life).  There’s an old adage that says “life insurance is sold, not bought.” 

Essentially, that means most people need the expertise and guidance of an experienced insurance agent to determine what’s best in their particular circumstance.  The internet has made it quick and easy (but impersonal) to obtain quotes, but the lack of sales (the number of non-purchasers) is staggering.  Let’s look at the different types, then for a complimentary, no-obligation review of your current life insurance program or retirement life insurance needs, call our office. We may be able to help cut your costs or increase your coverage.

Term Insurance

Sometimes referred to as temporary insurance, this product provides you a specific coverage at a specified price for a specific period (like 20 years). Amounts can remain level or decrease over the time period. If you die during the term, your beneficiary receives the coverage value. At the end of the term, coverage stops and you must qualify for new coverage based on your attained age and current health. There is no cash value component to these policies and coverage becomes more costly at older ages (or if your health degrades).

Whole Life

Whole Life is considered “permanent” coverage because you pay a specific premium for your lifetime and receive coverage for your whole life (benefits are paid to your beneficiary at your death). Premiums for Whole Life are higher than term insurance for the same coverage. A portion of the premiums are invested by the insurance company to help level your premiums for life and establish a cash value component to the policy. Cash values normally grow by a low guaranteed rate and may be supplemented by excess interest or dividends. A portion of the cash value may be available for use during your lifetime without significantly disrupting the death benefit component of the contract.

Indexed Universal Life

Permanent life coverage ensures that enough cash is available inside your life contract to cover all expenses associated with the life insurance benefit. Cash value is established through your minimum premiums, excess premiums made at your discretion up to maximum limits, and earnings on your cash value. Earnings are created from interest credits on cash value in your contract above the amounts needed to pay expenses. You can choose interest credits that are declared by the insurance company or linked to an outside stock index such as the S&P 500 (or others).  For detailed IUL info, see the “Money for Your Life” page.