Life Insurance
There are a variety of life
insurance policies that we can provide. The kind of policy you choose depends on
your needs:
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These products are
continually changing and we can provide you with the latest information and
policies available!
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Nobody wants to talk about life insurance. But if you have young children or others who depend on you, you should have it. Millions of Americans have no life insurance, and millions more don't have enough to provide financial security for their loved ones.
Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy. Essentially, the insurance company agrees to pay an agreed upon sum of money to the insured's named beneficiary so long as the insured's premiums are current.
Average premiums for individual life insurance have been falling about 5% a year since 2000, and they're expected to drop an additional 4% in 2008. The cost of life insurance varies depending on such factors as the insured's age, health, and occupation. For example, the premium for a 25-year-old, male, non-smoker in excellent health will be far less expensive than a similar policy for a 65-year-old male smoker.
Don't rely on your employer's life insurance policy. Many companies offer life insurance as a benefit, but it's usually not enough to provide financial security for your family, Kalen says. Most workplace policies cover one to two times your annual salary. Financial planners generally recommend buying enough insurance to replace seven to 10 times your annual salary.
In addition, most employer-provided policies aren't portable. If you change jobs, there's no guarantee your new employer will offer a life insurance benefit. If you've had health problems, the cost of buying an individual policy may be prohibitive. Buying your own life policy while you're young and healthy is a much more stable financial strategy.
Also if you have health problems, don't assume you're uninsurable. Advances in the treatment of cancer and other diseases have led insurers to lower premiums for people once considered high-risk.
The standards for the best rates vary among insurers, so it pays to work with an independent insurance brokerage firm that deals with several insurance carriers like the Global Insurance Group.
Term Life Insurance is a low-cost way of providing maximum coverage for your family. Protection is provided for a limited number of years. The insurance expires without value if the insured lives beyond the policy period, usually 5 to 20 years. Other policy life periods are available, including 1 year annual renewable term.
Term insurance premiums will not increase during the guaranteed policy time period (term) you select. Term Life Insurance pays a death benefit only if you die during that term. Term insurance generally provides the largest insurance protection for your premium dollar.
Term Life Insurance remains in force for as long as premiums are current, provided there are no misrepresentations on the application. The insurance coverage terminates if you discontinue your premium payments.
Whole Life Insurance provides permanent protection for the whole of life - from the date of policy issue to the date of the insured's death, provided that premiums are paid. Premiums are set at the time of policy issue and remain level for the policy's life. Premiums for permanent life insurance are considerably higher than premiums for term insurance.
Unlike term insurance, whole life combines insurance protection and savings or cash value which builds over time. Cash value build-up may provide a source for living benefits, for example, helping pay off a mortgage, or a child's education, or cash surrender value if the policy is ever cancelled.
Permanent policies are appropriate for people who use insurance as part of an estate-planning strategy and want the policy to last until they die.
Universal Life is characterized by great flexibility. Policyholders can determine the amount and frequency of premium payments - i.e., the more you pay, the less time you will need to pay. The flexibility of this type of policy allows you to change the amount of insurance as your needs for insurance change. Some changes require underwriting approval.
As with all life insurance, the main purpose for buying a Universal Life insurance policy is the death protection provided to your loved ones at your death.
Other Benefits of Universal Life
Tax-Free death benefit -- Under current tax laws governing individual life insurance, life insurance proceeds are generally income tax free to the beneficiary.
Tax-Deferred account value growth -- Your policy's Account Value earns interest at the company's current interest rate -- federal income tax deferred. The current interest rate is guaranteed to be at least 4% a year.
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