Life insurance can be easily summarized as “peace of mind’ insurance knowing that when that time comes a financial hardship will not be left behind.
Another unique characteristic of life insurance is the tax free liquidity of the death benefit. Its another example of a “peace of mind” benefit that lets you rest assured that if you purchase a $1 million dollar policy that is exactly what will be paid to your beneficiary upon death.
Life insurance policies are complex but can be broken down into 2 basic categories: Term Insurance & Permanent Insurance.
Term Insurance is a temporary policy that is used to meet a specific need over a defined period of time. The policy will only pay if death occurs in that defined period of time. Term policies can vary in length but most commonly appear in 10, 15, 20, 25 and 30 year increments. Level term insurance allows the insured to pay a fixed monthly premium over the life of the policy which makes budgeting life insurance costs much easier. Once the policy has reached its limit many term policies will allow for the insured to convert the policy on a guaranteed basis without the proof of insurability. This is a key aspect of term insurance to insure that at the end of the life of the policy you are not left without any coverage
Most Common Uses of Term Insurance include:
- Family Planning – Income Replacement
- Mortgage/Loan Insurance
- Key Man Insurance
- Buy/Sell Partnership Agreements
Click here to access a Life Insurance Calculator, courtesy of the nonprofit organization, Life Happens.
Permanent Insurance provides a lifetime benefit payable upon death. Permanent insurance can vary widely but most commonly there is a cash value that accumulates with the life of the policy. Most permanent insurance policies provide a guaranteed death benefit and as the market changes many also provide an ability to access that death benefit early if there is a need for long term care or terminal illness.
Most Common Uses of Permanent Insurance include:
- Estate Planning
- Burial Insurance
Finding the right policy that meets your needs can be a complex process. With over 20 years of experience and access to hundreds of insurance products we can help you navigate this process. Let us find the best plan that fits your needs.
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