Life Insurance

FINANCIAL PROTECTION

FOR YOUR LOVED ONES

Life insurance is a crucial part of financial planning and should not be overlooked when considering your long-term goals. Whether you are just starting out, in the middle of raising a family, or beginning to plan for retirement - life insurance policies offer exceptional protection for everyone’s needs.

Life Insurance Benefits

A valuable financial tool that safeguards your family's well-being by providing financial protection and security in the face of unexpected events.
Offers peace of mind, knowing that your loved ones will be taken care of and can maintain their lifestyle, even in your absence.
Provides a financial safety net, ensuring that your family can cover expenses, such as funeral costs, mortgage payments, education costs, and day-to-day living expenses when when you are no longer here to take care of them yourself.

WHAT IS LIFE INSURANCE ?

At its core, a life insurance policy is "a promise" to provide financial protection for your loved ones if you are no longer there to provide for them.

The way a policy carries out that promise is defined by a few Key Features:

The Death Benefit

The amount of money the insurance company will pay out to the beneficiaries listed on the policy when the insured person dies. Typically, this benefit is income-tax free.

The Beneficiaries

The person or people listed on the policy to get the death benefit. It can all go to a single person (e.g., a surviving spouse), or it can be divided by percentage among a few people (e.g., a spouse could get 50%, and two adult children could each get 25%). And by the way, a beneficiary doesn’t have to be a blood relative or even a person – if you choose, you can leave all or part of your death benefit to an entity, such as a charitable cause.

The Policy Length or Term

The time period that the insurer agrees to pay a death benefit. In a term policy, it’s defined as a specific number of years, such as 10, 20, or 30. A permanent policy lasts for the life of the insured, for whole life as long as premiums are paid, and for universal life as long as the policy is funded properly to pay monthly expenses.

The Premium - The monthly or yearly payments needed to keep the policy in effect.

The Cash Value

The policy’s saving component that builds over time and can be cashed out or borrowed against. A term policy has no cash value.

TYPES OF LIFE INSURANCE

Term Life Insurance

Term Life Insurance (TERM) is exactly what the name implies: coverage for a specific "term" or period of time, typically between 10 and 30 years. It is sometimes called “pure life insurance” because, unlike whole life insurance, the policy does not build cash value. It is temporary coverage designed solely to give your beneficiaries a payout if you die during the term.

There are two types of Term Life Insurance:

Standard Level Term
Decreasing Term

For standard term policies, the premium remains level, which means that you pay the same amount every month.

For decreasing term policies, as the name suggests, the benefit amount drops as the term (period of time) progresses. The drop is periodic, usually every year or every 5 years. Because of this, most people prefer to go with level term policies.

The premiums for term life insurance are generally lower than the premiums for permanent life insurance, making it an affordable option for budget-conscious individuals. But term life insurance policies do not provide coverage beyond the policy term. When the term expires, there is no more coverage, so at the end of the term you either have to go without coverage or get a brand new policy, which will likely come at a higher cost because the older you are, the more expensive it is to get a policy. Some term policies, however, are "renewable" or "convertible", allowing policyholders to extend the coverage or convert it into a permanent policy at the end of the term, respectively. Term policies are ideal for individuals with temporary financial obligations, such as a mortgage, loans, or young children who will eventually become financially independent.

Whole Life Insurance

Whole Life Insurance (WL) is the simplest form of permanent life insurance, providing coverage that lasts for your "whole" entire life. In other words, it lasts “until you die”.

The premiums for whole life insurance are generally higher than the premiums for term life insurance but remain level for the policy’s life. Like other permanent policies, it includes a cash value component where a portion of your premium dollars are placed into a cash value account, and this sum grows over time on a tax-deferred basis, so you don’t pay taxes on the gains. It does take a few years to grow into a useful amount, but policy holders can access it through policy loans or withdrawals for various purposes, such as supplementing retirement income, paying for education expenses, or funding emergencies. Whole life insurance offers lifelong coverage and suits individuals who want a policy combining protection and savings.

Compared to other forms of permanent coverage, a whole life policy has three defining characteristics:

The premiums are level and remain the same for life
The death benefit is guaranteed as long as the premiums are paid
The policy includes guaranteed cash values that grow at a guaranteed rate.

And when you get a whole life policy from a Mutual Company, your cash value can also earn Annual Dividends which allow you to get a portion of the insurer’s profits, which can be used to increase the value of your policy and provide other benefits.

Key differences between Term and Whole Life Insurance include:

The Policy Length

A whole life policy lasts your entire life, while a term policy only provides temporary coverage for a limited number of years. Once the term expires, your beneficiaries are no longer entitled to a death benefit.

The Cash Value

A term policy has no value once it expires. A whole life policy is a life-long asset that can be accessed to help meet financial goals up to and after retirement.

The Premium

For a given death benefit – e.g., $100,000 – premiums will be higher for whole life, along with the certainty that your beneficiaries will eventually be paid a death benefit.

Universal Life Insurance

Universal Life Insurance (UL) is another form of permanent life insurance that offers the cash value and the same lifetime coverage benefits of whole life. But there’s a fundamental difference compared to whole life: the premiums are "flexible".

With a universal life policy, you can raise or lower the amount you pay into the policy as you see fit, within the limits of the policy. But paying in less could eventually result in the need to pay in higher amounts in later years to keep your coverage. This type of policy can be adjusted to the circumstances of your life, while providing the same kind of cash value growth as whole life. Having another child, moving on to a different job, or taking out a loan to buy a business – all might be instances where a combination of security and flexibility becomes important - making it an attractive choice for individuals who want more control over their policy and the potential for higher cash value growth.

Indexed Universal Life Insurance

Indexed Universal Life Insurance (IUL) is a variation of universal life insurance that can build cash value quickly based on the performance of specific stock market indexes, such as the S&P 500 or the Nasdaq 100.

They can be used as a tax-free retirement fund to supplement your 401K or Social Security. They can also be written for a newborn, and build cash value over time to pay for college tuition, a down payment on a first house, or retirement. IULs are considered one of the safest positive interest money building accounts available and can be tailored to individual needs and budgets. It combines the flexibility and investment options of universal life insurance with the potential for higher cash value growth based on the performance of the chosen index. Indexed universal life insurance balances protection and growth potential, making it an option for individuals looking for a policy that can provide both lifelong coverage and the potential for higher returns.

Final Expense Life Insurance

Final Expense Life Insurance (FEX or FE) is a form of life insurance intended only to cover end-of-life expenses such as funeral, burial, or cremation costs. The coverage is permanent, which means that as long as you continue making premium payments, the policy will remain in effect until you die. Older people often buy final expense coverage without dependent children because it helps protect loved ones who might otherwise have to cover these costs out-of-pocket. While the premiums for these plans tend to be modest, the death benefit is also very limited because this type of insurance is not meant to provide years of financial support to your beneficiaries. Younger, healthier people who want to build cash value or a significant death benefit for their families will likely be able to find greater value in a whole life, universal life, indexed universal life or term life policy.

We offer both term and permanent plans, and we are licensed in most states. Request a review of your existing life insurance, or contact us to get a free no obligation quote on a new life insurance plan. Our licensed specialists can design a plan that fits your unique needs and your budget.