What type or types of Life Insurance do you need.
Types of Life Insurance
Term Insurance is the most affordable type of insurance when initially purchased and is designed to meet temporary needs. It provides protection for a specified period of time (the “term”) and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will end at a specific time in the future. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage. Terms vary from 5 – 40 years. Various riders are available to accommodate your specific needs.
Whole Life Insurance is a life insurance contract with level premiums, that remains in effect as long as premiums are paid, that has both an insurance and a savings component. The insurance component pays a stated amount upon death of the insured. The savings component accumulates a cash value that the policyholder can withdraw or borrow against.
As the most basic form of cash-value life insurance, whole life insurance is a way to accumulate wealth as regular premiums pay insurance costs and contribute to equity growth in a savings account where dividends or interest are allowed to accumulate tax-deferred. Whole Life policies can be used as a creative, tax advantaged way to transfer wealth to your beneficiaries
Final Expense Insurance (a specialized type of whole life) is an insurance policy used to pay for funeral services and a burial when the insured dies and may include coverage for outstanding debt, such as credit cards. A final expense insurance policy helps ease the financial burden placed on a family when a loved one dies. Final Expense insurance is typically purchased when the insured age is between 50 and 80.
Universal Life Insurance was created to provide more flexibility than straight 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 their 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. There are many varieties of Universal Life Insurance policies issued by most life insurance companies.
Needs Analysis is a review of your situation to determine your needs and find solutions for those needs. Each person or family is different and there is no “standard” policy that meets everyone’s needs. Needs also change throughout the course of your life. When you are young and just starting a family and career, you might need to plan for what your spouse, children and even parents might need in the event you were no longer available to support them. As children grow and graduate from school, they may no longer need your financial support in the same way they did as young children. When the mortgage is paid off, you may not need to be concerned about the living expenses in the same way as when you had a monthly mortgage payment. As you plan for the future, your plans may adjust from finding replacement financial assistance in the event of your death and may be more concerned with providing retirement income and security.
We would be happy to work with you and your family to determine your current insurance needs as well as to assist you with planning for your changing needs in the future. Our primary purpose is not to sell you insurance but rather we are here to help you determine your needs and obtain the best solutions to meet those needs within your budget.
One thing always remains constant, Life insurance costs increase with age and deteriorating health conditions. You cannot plan too early. Contact me today to arrange a no obligation insurance needs analysis. 800-601-8650