Life Insurance is designed to protect your beneficiaries in the event of your death. The death benefit can help compensate a family for your lifetime income. It is an agreement between you and the insurance company. You pay them a monthly premium, and when you die, the insurance company pays a specific amount of money to whoever you choose.
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Who needs life insurance?
Anyone depending on the money you bring in, you need life insurance to safeguard them. Some examples of common expenses to cover are: mortgage payments, college tuition, car payments, funeral expenses, etc.
There are many types of life insurance policies to fit the goals of individual or family needs. However, most of them fall into 2 main categories: Term Life Insurance and Permanent Life Insurance (Whole Life Insurance).
Term Life Insurance – a type of life insurance policy that has a specified end date, like 20 years from the start date. The death benefit will only be paid out if the insured dies during this time period. This is the amount of money that will be paid to the beneficiary when the insured passes away and it can be issued in a variety of ways, such as a lump-sum payment or as annuities. This type of insurance is more affordable and is often purchased for temporary coverage during working years.
Whole Life Insurance – a type of permanent life insurance that accumulates a cash value in order to last the lifetime of the insured person. Cash-value life insurance also allows the policyholder to use the cash value for many purposes such as a source of loans or cash or to pay policy premiums.
Universal Life Insurance – a type of permanent life insurance with a cash value component that earns interest. Universal life features flexible premiums. Unlike term and whole life, the premiums can be adjusted over time and designed with a level death benefit or an increasing death benefit.
Indexed Universal Life Insurance – is a type of universal life insurance that lets the policyholder earn a fixed or equity-indexed rate of return on the cash value component.
Variable Universal Life Insurance – a type of insurance that allows the policyholder to invest the policy’s cash value in an available separate account. It also has flexible premiums and can be designed with a level death benefit or an increasing death benefit.
To determine the types of life insurance for your needs and purposes, contact us today to schedule a time to review your situation to find the right coverage.
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