LIFE INSURANCE

Home Owners

WHOLE LIFE

Permanent death benefit coverage with level premiums for the life of the insured and also has a savings component in which cash value may accumulate.  Interest grows at a fixed rate and tax-deferred basis.  Cash value can be borrowed against and either repaid or principal and interest can be deducted from the death benefit. 

Key points:

  • Level premiums

  • Level death benefit

  • Cash value is a living benefit and can be used like a loan

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UNIVERSAL LIFE

Much like Whole Like, in that it offers lifelong coverage, guaranteed death benefits and cash value.  Universal Life is permanent life insurance with an investment savings element.  It offers flexible premiums and death benefits.  Premiums consist of two parts: cost of insurance (COI) and a savings component.  COI is the minimum payment necessary to keep the policy in force.  Any part of the premium that exceeds the COI accumulates within the cash value portion of the policy.  These policies act much like savings accounts. 

Key points:

  • Permanent coverage

  • Adjustable premium & death benefits

  • Cash Value accumulates interest

  • Often used much like a savings account

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TERM LIFE

  • Temporary life insurance that guarantees payment if a person dies during the specified term.  Most common terms are 10, 20 and 30 years

  • Once it expires, the owner can renew it for another term at a higher premium, convert it to permanent whole life coverage or allow it to terminate.

  • This type of policy only pays a death benefit if the insured dies during the specified period.

  • Has no value other than the death benefit

  • If you choose to renew the policy, premiums will be recalculated based on your age and will increase.

  • Least costly type of life insurance

  • Better suited to people still in their working years with mortgages and other debt.