The number and different types of life insurance policies available on the market can be overwhelming and confusing to choose from. Understanding what types of policies are available to you and what they can offer can make it easier and less time consuming. There are two general categories of life insurance policies: temporary and permanent. They both include coverage in the form of a payout to your chosen beneficiary in the event of your death, but the additional benefits these policies can offer you differ.
Term Life Insurance
Term life insurance is a temporary solution to get the insurance protection you need.
Life insurance is designed to provide protection against the financial loss and hardship your loved ones might experience if something unexpected were to happen and you died.
Because term insurance is intended to be temporary, your initial cost is less than permanent insurance protection of the same amount.
Here are some of the benefits of a term life insurance policy:
Initial Affordability
During the level premium period, this is the least expensive kind of insurance protection you can purchase.
Level Premiums
Premiums will remain unchanged during the designated level premium period of your policy.
Conversion
One of the most valuable benefits is the opportunity to convert to the protection of permanent insurance without proving you are still insurable. Your conversion privilege is limited to the level premium period of your policy or age 65, if sooner. Here are some types of term products:
ART
This is an Annual Renewable Term insurance plan and premiums increase each year.
Term 10
Premiums are guaranteed to remain level for 10 years. After 10 years, the premiums required to continue insurance protection will increase annually.
Term 20
Premiums are guaranteed to remain level for 20 years. After 20 years, the premiums required to continue insurance protection will increase annually.
Return of Premium Term 20
Premiums are guaranteed to remain level for 20 years. After 20 years, the premiums required to continue insurance protection will increase annually. All base premium will be returned to the policy owner when the policy is still active on its 20th anniversary.
Term 30
Premiums are guaranteed to remain level for 30 years. After 30 years, the premiums required to continue insurance protection will increase annually.
Term to 70
Premiums are guaranteed to remain level until your policy anniversary following your 70th birthday. After the anniversary, following your 70th birthday, the premiums required to continue the insurance protection will increase annually.
Riders available
Consider some of these additional benefits available with any of our term life insurance products:
Waiver of Premium Rider
Waives premiums if you should become totally disabled, as defined in the rider.
Children’s Rider
Provides level term insurance for your children.
Accidental Death Rider
Provides an increased death benefit equal to the face amount of your policy if you die as a result of an accident, up to a maximum described in the policy.
Permanent Life Insurance
Whereas there is really only one type of temporary insurance policy, there are a number of different options in the permanent life insurance market. This includes guaranteed death benefits, guaranteed cash values and the security of a fixed annual premium.
Premier Whole Life
What Whole Life insurance means…
With Premier Whole Life, all you do is pay the level premium amount that is guaranteed to never increase and we guarantee insurance protection. Your policy will accumulate cash value, from which you can borrow. Whether it’s a down payment on a new home or paying for a child’s college education, when you need the money, it is there for you.
- Permanent protection that can never be cancelled as long as you pay your premiums
- A level premium that is guaranteed never to increase
- A guaranteed death benefit, generally free from federal income tax
- Tax-deferred cash value accumulation
- The potential to earn dividends (dividends are not guaranteed)
Life insurance is the cornerstone of any sound financial plan. When you buy life insurance, you help to protect your family’s financial security since the money your beneficiaries receive in the event of your death can help to pay their expenses at an extremely difficult time. Life insurance can provide your family with greater peace of mind.
Whole Life Paid Up At Age 65
When you know you want permanent and affordable life insurance protection, Whole Life Paid Up at Age 65 may be the right choice for you. This policy offers basic life insurance protection that is designed to last until you need it. It is simple and uncomplicated. You pay the level premium amount that is guaranteed to never increase, you will stop making these premium payments at age 65, and the insurance protection is guarantee. It’s that simple.
Whole Life Paid Up at Age 65 is ideal for children. The policy is controlled by the owner and can later be transferred at the owner’s direction. Like other Whole Life policies, it accumulates cash value on a tax-deferred basis and the guaranteed death benefit is generally free from federal income tax.
Whole Life Paid Up at Age 65 is a participating policy. This policy may share in company surplus through annual dividends earned by your policy. Consider, too, some of the additional benefits available with the Whole Life Paid Up at 65:
- Paid-Up Additions Rider
Allows you to purchase additional paid-up permanent insurance at an affordable cost, which has cash value and loan value, and may be eligible for dividends.
- Disability Premium Waiver
Waives premiums if you should become totally disabled, as defined in the rider.
- Accidental Death Rider
Provides an increased death benefit equal to the face amount of your policy if the insured dies as the result of an accident.
- Accelerated Death Benefit Rider
Allows you to access a portion of the death benefit if you are diagnosed with a terminal illness as defined in the rider.
Universal Life
This option provides you with greater flexibility in both premiums and potential return. It still offers both a payout in the form of life insurance coverage and the potential of a cash value to increase with the term of the policy.
Flexible Premiums
A UL policy is designed to be more flexible than some other types of life insurance. You can decide how much premium to pay, within certain minimum and maximum limits. This means you can pay less when you need to, or pay more to accumulate additional account value on a tax-deferred basis.
Maintaining your policy
Understanding the mechanics of a UL policy can help you maintain your coverage and take advantage of the accumulation potential that the policy offers. Your policy will not lapse as long as the account value (less any applicable surrender charge or policy loan balance) is sufficient to cover the monthly policy charges.
The policy charges are based on age and issue class and vary each month based on the difference between the account value and the death benefit. Paying the minimum premium to keep your policy from lapsing may result in the need for higher premium payments later. Alternatively, starting out paying higher premiums offers greater potential for account value accumulation.
Endowment
This type of policy, which is similar to annuities, acts more as an investment than does traditional life insurance. The principal is protected and a payout is guaranteed, but the premiums are much higher than those of other types of life insurance.
There are other types of Insurance Policies such as Variable Universal Life and First To Die or Second To Die policies, just to name a few. Choosing the right type of life insurance can be complex, so take the time to sit down with one of our Insurance Advisors to discuss the best plan for you and your family. Complete the request form to receive your free consultation.