Life Insurance


There are many different types of life insurance available to consumers like you. Some include things like living benefits and cash value accumulation. Some contracts allow you to make withdrawals or loans on the policy.

No matter these variations, the basic benefit that all life insurance policies provide is a death benefit to replace income in the event of your death. This is important, as many households cannot sustain in the death of an income earner.

You may be the primary wage earner, or in a dual-income household. Your unexpected loss can cripple your surviving family, now fully responsible for covering things like mortgage payments, debts, college education, and so forth. This makes finding an appropriate life insurance policy so critical.

Because life insurance is generally tax-advantaged, it can also be a great solution for individuals with legacy or wealth transfer needs. A death benefit can provide your beneficiaries the liquidity to settle estate tax and other responsibilities.

While life insurance is available in many varieties, there are two basic categories: Term Life and Permanent Life.

Term Life Insurance

Term Life Insurance policies provide a death benefit for a certain period of time. If you die within the contract benefit period, then a payout is issued to your beneficiaries. If, however, you outlive the period, then benefits are not issued, though you may have an option to renew for another term or convert to a different type of policy.

Term life policies do not include cash value accumulation. Instead, they are strictly used for a death benefit. Because of this, term life policies are often some of the least expensive life insurance contracts available.

Permanant Life Insurance

Permanent Life Insurance policies grant total coverage for an insured’s life, so long as contract terms are met and the policy stays in force. Permanent Life Insurance also includes a cash value component that accumulates during the period of coverage.

There are two basic sub-categories of permanent life: Whole Life and Universal Life. The main difference between the two is that whole life is paid with regular payments, while universal offers flexible options for premium payments.

Each of these sub-categories likewise has its own variations, based on their utility and how they accumulate value. One common version of Whole Life Insurance is Guaranteed Issue, which has limited (or no) underwriting and a small interest rate, all designed to for people with less-than-ideal health to gain final expense coverage.
Universal Life Insurance Polices common variations include:

Guaranteed Universal Life (UL-G)

Issues a death benefit even if the cash value account is used up, as long as premium targets are met.

Fixed Indexed Universal Life (FIUL)

Accumulates a cash value at an interest rate based on a specific stock market index, similar to a Fixed Indexed Annuity.

Current Assumption Universal Life (CAUL)

Allocates payments beyond the pure cost of the policy into an investment portfolio, often the carrier’s general investment account.

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