Life Insurance
Term, whole, and universal life insurance options to protect your family's financial future. We work with top carriers including National Life Group and Transamerica to find the right fit.
Life Insurance
Life insurance is a subject no one really wants to think about. However, whether you are single or have a family, it can be an important part of a comprehensive financial strategy. There are several types of life insurance, but they all share the same basic purpose: the insurance company pays a death benefit to your designated beneficiaries when you pass away.
Some life insurance policies also offer living benefits, which may allow you to accelerate a portion of the death benefit if you experience a qualifying illness or injury. Life insurance proceeds are generally not subject to federal income tax when paid as a death benefit, although certain circumstances may result in different tax treatment.
The goal is to help you or your beneficiaries remain financially secure and cover expenses such as:
- Daily living expenses
- Outstanding loans and other debts
- Mortgage payments
- College tuition
- Final expenses
- Other financial obligations
Life insurance can be customized to address specific financial needs and may provide features that are important to your overall financial strategy.
Term Life Insurance
Term life insurance is generally the most affordable type of life insurance when initially purchased. It is designed to meet temporary financial needs by providing coverage for a specific period. Generally, a death benefit is paid only if you pass away during the policy term and the required premiums have been paid.
Term life insurance can make sense when your need for coverage is expected to disappear at a specific point in time — for example, when a mortgage is paid off or children become financially independent. Depending on the policy, term insurance may be convertible to permanent life insurance during a specified conversion period, often without additional medical underwriting. Some policies may also be renewable after the initial term, although premiums will typically increase as you get older.
Premium structures may include:
- Level term: Premiums remain fixed for a specified period, such as 10, 20, or 30 years.
- Annually renewable term (ART): Coverage is renewed each year, with premiums generally increasing as you age.
Term life insurance generally does not accumulate cash value. However, some insurers offer living-benefit riders that can provide access to a portion of the death benefit if certain qualifying conditions occur. One of the primary advantages of term insurance is that it can provide a relatively large death benefit for a lower premium compared with many permanent life insurance policies.
Whole Life Insurance
Whole life insurance is one of the simplest forms of permanent life insurance. It is designed to provide lifelong protection, subject to the terms of the policy and payment of required premiums. Unlike term insurance, whole life premiums are generally designed to remain level for the life of the policy. The insurer typically cannot increase the premium simply because you become older or develop an illness, assuming the policy remains in force under its contractual terms.
Whole life premiums are generally higher than term life premiums for the same amount of coverage because whole life insurance includes a cash value component in addition to the death benefit.
Key features may include:
- Lifetime insurance protection
- A guaranteed death benefit, subject to policy terms
- Level premiums
- Cash value accumulation
- Tax-deferred growth of cash value
- A guaranteed minimum interest rate, depending on the policy
The cash value may provide a conservative accumulation component within the policy. Because of its guarantees, whole life is often considered one of the more conservative forms of permanent life insurance, although actual policy performance depends on the specific contract and insurer.
Universal Life Insurance
Universal life insurance is another form of permanent life insurance designed to provide coverage that can last throughout your lifetime, subject to the policy's terms and sufficient premiums or cash value to keep the policy in force. Universal life is sometimes referred to as adjustable life insurance because it can offer greater flexibility than whole life insurance.
Depending on the policy, you may be able to adjust the death benefit and modify the timing or amount of premium payments after the initial payment, subject to policy requirements and limitations. You may also be able to increase the face amount, typically subject to additional underwriting, or decrease the death benefit without surrendering the policy.
With universal life insurance, premium payments are generally allocated between the cost of insurance and the policy's cash value. Universal life may also provide access to cash value through policy loans and withdrawals. However, loans and withdrawals can reduce the policy's cash value and death benefit and may increase the risk of the policy lapsing. Any tax consequences should be reviewed with a qualified tax professional.
Depending on the policy's accumulated value and charges, it may sometimes be possible to reduce or temporarily stop premium payments. This does not mean premiums can always be stopped without consequence; sufficient cash value must be available to cover policy charges.
Types of Universal Life Insurance
Indexed Universal Life (IUL)
Indexed universal life insurance generally credits interest to the policy's cash value based in part on the performance of a market index, subject to the policy's specific terms. IUL can provide opportunities for greater cash-value growth than traditional fixed universal life, but it also involves important limitations. These may include participation rates, caps, spreads, fees, and a guaranteed minimum interest-crediting provision that varies by policy.
Variable Universal Life (VUL)
Variable universal life insurance allows the policy's cash value to be allocated among investment options, which may include portfolios that operate similarly to mutual funds. The policyholder generally chooses how cash value is allocated among the available investment options. Because the underlying investments are subject to market fluctuations, the cash value can increase or decrease. VUL policies may also have investment-management expenses and other policy charges that should be carefully reviewed before purchasing.
Guaranteed Universal Life (GUL)
Guaranteed universal life insurance is designed primarily to provide a guaranteed death benefit for life rather than maximize cash-value accumulation. Depending on the policy, coverage can be guaranteed to a specified age, potentially as high as age 121, provided the required premiums are paid according to the policy terms. GUL typically has little cash value compared with other permanent life insurance products and may have very little or no meaningful cash accumulation. Its primary appeal is the ability to obtain permanent death-benefit protection at a cost that may be lower than many other permanent insurance options.
Mortgage Protection
Mortgage protection is a type of life insurance designed to protect homeowners and their families by helping pay off the mortgage if the insured becomes completely disabled or passes away. Mortgage protection is similar to term life insurance because coverage is provided for a specific period, generally corresponding with the term of the mortgage.
However, there are several key differences:
- The mortgage lender is the beneficiary: Unlike traditional life insurance, where you choose your beneficiaries, the mortgage lender is typically the sole beneficiary of a mortgage protection policy.
- The death benefit generally decreases: Because the purpose of the policy is to help pay the remaining mortgage balance, the death benefit typically decreases over time as the mortgage balance is paid down.
- Coverage is generally tied to the original mortgage: Mortgage protection typically covers the balance of the initial mortgage amount, including applicable interest. It generally does not automatically provide coverage for amounts added through refinancing.
Disability Insurance
Disability insurance is designed to protect one of your most valuable financial assets — your ability to earn an income. If an illness or injury prevents you from working or earning an income, disability insurance can provide financial support while you recover.
Your income is essential to meeting your current and future financial needs. Without disability insurance, a period away from work can create significant financial stress as you manage everyday expenses, mortgage payments, and family responsibilities. With the right disability insurance coverage, you can replace a portion of your lost income and focus on your recovery without the added burden of worrying about how to meet your financial obligations.
Disability insurance is generally available in two forms:
Long-Term Disability (LTD) Insurance
Long-term disability insurance typically has a waiting period ranging from several weeks to several months. Depending on the policy, benefits may be payable for several years or potentially until retirement or the end of the benefit period.
- Waiting periods typically range from several weeks to several months.
- Benefit periods can range from a few years to much longer periods, depending on the policy.
- Monthly benefits can be as much as approximately 60% of your gross monthly income, subject to the policy's terms and maximum benefit limits.
Short-Term Disability (STD) Insurance
Short-term disability insurance is designed to provide income replacement for a shorter period following a qualifying disability.
- Waiting periods may range from 0 to 14 days, depending on the policy.
- Benefits generally last no longer than two years.
- Coverage may replace a portion of your income, potentially up to 80% of pre-tax income, subject to the policy's terms and benefit limits.
Contact us today for a no-obligation consultation. Our team is here to help you find the right coverage and services for your needs.
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