Life Insurance Only will customize your insurance coverage to suit your requirements. Here are some of our most popular Life Insurance options:
Term Life insurance
Term insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified “term” of years. Term insurance is initially much less expensive when compared to permanent life insurance. If the insured dies during the time period specified in the policy and the policy is active – or in force – then a death benefit will be paid. A good way to understand a product is by its origins. Term insurance was created as loan protection for lenders. Lenders wanted insurance on a borrower in case of death. The borrowers did not want to take out expensive permanent protection for a loan they planned to pay back within a certain time period. So term insurance was created. To this day many banks require a borrower of a mortgage or other loan to take out a life insurance policy which is usually term.
These origins illustrate that term isn’t always best. Life insurance is always individual and case specific.
Term policies offer level premiums for the duration of the policy, such as 10, 20, or 30 years. Premiums are level for a set number of years, after this time period the premium increases significantly. Most term policies have an option to convert to a permanent policy regardless of any changes in the insured’s health.
Permanent insurance is the original form of life insurance. Since term insurance has taken over the life insurance market, you will hear this original life insurance product referred to as “permanent life insurance”. There are various forms or permanent life insurance, all serve a different purpose. One size does not fit all!
Types of permanent insurance
Permanent Life Insurance
Some companies offer a straight permanent life insurance. The advantages are a level premium.
A permanent policy that supplements itself by making use of insurance company dividends. At the end of each policy year a participating policy receive a company dividend. A dividend is a portion of the profits the company made that year. Generally these profits are given back in three forms:
- Paid up additions-purchasing more insurance policy dividends, produces a compounding effect adding more insurance to your account. Talk to your life insurance agent about your end goal in life insurance. This option may be the perfect way to plan your long term insurance goals.
- Annual premium reduction-the dividend reduces your premium annually until the compounded dividends fully take over the policy premium.
- Cash Back-the annual dividend will come back to you in cash.
Universal Life Insurance
Universal Life Insurance is permanent life insurance policy that has an investment portion. The investment portion is used to enhance the life insurance purchased. It was very popular when the stock market was high in the 80’s. Currently, it is commonly used in estate planning.
If you require protection for the rest of your life, a permanent policies is always more cost effective compared to a term policy. Best way to know which option is right for you is to discuss your options with your advisor.
Critical Illness Insurance
A critical illness brings a financial burden along with it. Critical Illness Insurance allows a beneficiary to recover without the additional financial stress of paying for treatments or an extended leave of absence from work. This insurance pays out a lump sum benefit when the beneficiary contracts critical illness. Since critical illness has become prevalent this insurance has been very popular. The truth is, you are more likely to get a critical illness then to die unexpectedly. Talk to your advisor about protecting yourself and family.
If you were to become disabled and could no longer work, this insurance would pay out 55% of your monthly income. This differs from Critical Illness insurance since it does not pay out a lump sum payment and instead insures you for a certain number of payments while you are not able to work.
When you meet with your advisor, we recommend that you ask the following questions to help determine the coverage that will best suit your needs:
- How much does my benefit need to be?
- How long do I need to be insured for?
- When will I need more insurance?
- What do I do when I need more insurance?
Please contact us if you have any questions!