Life Insurance Explained

Understanding Your Life Insurance Policy

Term Life As implied by the name, term life insurance provides protection for a period you select, such as 10, 20, or 30 years, and is generally the least expensive form of life insurance protection. Term life insurance is very simple. Designed to provide temporary life insurance protection, it can be purchased in large amounts and still fit within budget limits. Term life insurance may be a good choice to help accomplish short-term goals such as loan protection.
Universal Life Universal life insurance is a permanent insurance that offers features such as premium-flexibility, adjustable benefits, and cash value. With a universal life policy, the cash value accumulates at the company’s current interest rate tax deferred. The current tax laws that govern individual life insurance generally allow proceeds from a life insurance policy to go to a designated beneficiary tax free.
Whole Life Whole life insurance is permanent insurance which is guaranteed to stay in force as long as you live and continue to make timely premium payments. Whole life offers a fixed death benefit for a fixed amount of premium. A whole life insurance policy guarantees to accumulate a cash value over time, which may be borrowed against. In most cases, if a policy is surrendered, whole life offers three non forfeiture options. The first surrender option is to take the cash value that has accumulated in the policy, minus any outstanding loans, in a lump sum payment. The second option is to use the cash value to purchase a policy which offers a lessor death benefit, based on the amount of cash value, and is paid up for life. The final option is to purchase and extended term policy which offers a death benefit equal to the policy’s original benefit for a specified period of time based on the amount of cash value in the policy. Request a free quote