Life Insurance is one of the cornerstones of financial security for you and your family. It protects your financial resources against the uncertainties of life so you can plan for the future. There are several types of life insurance available: term, mortgage protection, final expense, whole, universal, buy-sell agreements, keyman, and many more. Call or email us to set up a personal interview so we may help you determine the right dollar amount and proper type of policy for your business and family's needs.
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GLOSSARY OF POLICY TYPES
Term life insurance pays the death benefit to the beneficiary upon the death of the insured. Term insurance is a cost effective way to get the life insurance coverage you need, it provides guaranteed level premiums (e.g. set monthly payments) and a specified amount of coverage for a specific period of time - as short as 1 year, or in duration's of 5, 10, 15, 20, 25 or even 30 years. Typically, you can get a higher death benefit for less money.
Universal life combines the low-cost protection of term insurance with a savings component that is invested in a tax-deferred account, the cash value of which may be available for a loan to the policyholder. Universal life was created to provide more flexibility than whole life by allowing the holder to shift money between the insurance and savings components of the policy. The one benefit though that these policies have in comparison to whole life is that the premiums are flexible. Universal Life allows the interest scheme allow the holder to take advantage of rising interest rates. The danger is that falling interest rates may cause premiums to increase and even cause the policy to lapse if interest can no longer pay a portion of the insurance costs.
Whole life provides coverage for an individual's whole life, rather than a specified term. Whole life insurance is the most conservative type of the three. A savings component, called cash value or loan value, builds over time and can be used for wealth accumulation. Whole life is the most basic form of cash value life insurance.
Permanent life provides death protection for as long as you live. In addition, permanent life insurance policies can build a cash value, money that you can borrow against and, in some instances, withdraw to help meet future goals, such as paying for a child's college education. Permanent life insurance also has better tax advantages over term life insurance. Think of Permanent life as owning property.
Buy-Sell / Key Man is typically the same as a term life policy, but the policy is owned by the insureds company, with the company as the beneficiary. The funds received at death are used to either buy-out the deceased partners ownership from the surviving dependents, or used to offset lost revneue and replacement costs from the loss of a key employee.