Life Insurance

Life Insurance is a subject that no one wants to think about. But whether you’re single or live in family, it’s the one financial tool you cannot avoid. There are many types of life insurance, all with the same bottom-line: The insurance company pays the death-benefit proceeds to your designated beneficiaries. Or, if it’s a life insurance policy with living benefits, you may be able to accelerate the death benefit due to a qualifying illness or injury.

Death-benefits proceeds are rarely subject to federal income taxes. Whether it’s death or living benefits, the objective is to allow you or your beneficiaries to remain financially secure and to help you cover daily living expenses, outstanding loans, mortgage payments, college tuition, and other expenses. Life insurance can be customized to fit very specific needs and offer features that can be critical to your financial strategy. 

Term Life 

Term life is the most affordable type of insurance when initially purchased. It is designed to meet temporary needs. It protects for a specific period and generally pays a benefit only if you die during the term, as long as your premiums are paid. This type of insurance often makes sense when you need a coverage that will disappear at a specific point in time like a Mortgage Term.

Term Life could either be converted into a permanent life within the first 15 years of the coverage or renewed once the period has expired, but premiums will likely increase. Premiums could be fixed if guaranteed and paid for the length of the term, which could be leveled to 10, 20, Or 30 years or annually renewable (ART) for a higher premium since the policyholder is a year older.

Term life accumulates no cash value, but some insurers offer other living benefits as riders to it. Typically, term life allows a higher death benefit for your premium dollars. 

Whole Life 

Whole life is the simplest permanent insurance option. Just like any other life insurance products, whole life is designed to provide financial protection to its policyholders in the event of injury/illness or death. Its premiums remain level for the life of the policy, which means your insurance company cannot raise your premiums as you get older or if you get sick. Premium for whole life policy tend to be significantly higher than term life policy with the same amount of coverage because of its potential to generate cash value.

Whole life offers lifetime protection and guaranteed death benefits if you pay the scheduled premiums. You can accumulate cash value on a tax-deferred basis. Most insurance companies offer a minimum rate of return on your cash value that is guaranteed. It will grow even when other investments stay stagnant or lose value. Whole life is the least risky version because its cash value portion is a simple savings account.

Universal Life 

Universal life is another type of permanent life insurance meaning coverage can last for your lifetime so long as premiums are paid. It’s also termed Adjustable life insurance because of the flexibility feature built into it. It allows you to reduce or increase your death benefit and to pay your premiums at any time in any amount after your first premium payment has been made. You can increase the face amount, subject to additional underwriting, or decrease it to a minimum without having to surrender the policy. Just like whole life, universal life insurance offers lifelong coverage. It’s less expensive, provides flexibility when it comes to paying premiums and choices for how the policy’s cash value is invested.

Cash value component and death benefits tend to be separated. For every premium payment made, a portion goes towards the cost of insurance to cover the death benefits and the rest is put in the cash value. The cash value is guaranteed with a minimum annual interest rate but may grow faster depending on the insurer’s market performance.

Because of its flexibility feature, you can access the funds using tax-free loans and withdrawals. You can also stop paying premiums if there is enough accumulated value in your policy to cover the cost of insurance each month.

Several types of Universal life should be considered if opting for universal rather whole life.

• Indexed Universal Life: IUL’s interest and cash values growth are tied to the performance of a major market index. offers greater control over the performance of your policy’s cash value growth. However, the guaranteed minimum interest rate is typically lower than that of a traditional universal life insurance policy and the insurer can cap your participation rate.
• Variable Universal Life: VUL allows you to invest the cash value in grouped investments that are like mutual funds. You’ll receive a list of potential investments, along with their performance history and fees, and can choose how much of the cash value is invested in each. They have management fees that are typically higher than those for other universal life insurance policies.
• Guaranteed Universal Life: GUL is a universal life insurance policy that won’t lapse if the cash value is zero. It tends to behave like a Term life policy that could mature to up to 121yr. Cash value could be very little or none. Its coverage cost is the lowest out of all universal products and it’s the best way to get the lowest quotes for permanent coverage.

Mortgage Protection 

Mortgage protection is a type of life insurance designed to protect you as a homeowner by paying off your mortgage if you become completely disabled or, worst case scenario, you die. The coverage is similar to a term life coverage in the sense that it guaranties to pay within the term off your mortgage. Main differences are:

• Your mortgage lender is the sole beneficiary of the policy rather your designated beneficiaries.
• Because it’s used to pay off your mortgage balance, it usually decreases the death benefit amount as your mortgage ages to match your remaining balance.
• Mortgage Protection only provides coverage for the balance of the initial mortgage amount along with interest, it won’t cover refinancing. Request A Quote

 Disability Insurance 

Disability insurance is a form of insurance that insures your earned income against the risk of being unable to perform your work or earn money due to a disability. Your ability to earn income is your greatest asset and is crucial to your financial plan. To meet your immediate or future needs, you must be able to work to earn that income or plan against the risk of unable to earn.

Without disability insurance, the time you’ll spend recovering from your disability could be stressful and difficult, as you try to find funds to cover the time you’ll miss and take care of your family. With a disability policy, you minimize any stress and discomfort you would have to face, which lets you focus on your recovery.

Disability insurance could be in long-term or short-term.

• Long term disability (LTD) insurance has a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life and the monthly benefit is up to 60% of your gross monthly income.
• However, short-term disability (STD) insurance has a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. Short-term disability insurance replaces a portion of your paycheck — up to 80% of your pre-tax income.