Life Insurance

What Is Life Insurance?

Life insurance is more than just a death benefit that protects your family if you die too young. Life insurance is an incredible tool that protects your estate, protects against long term care costs with living benefits and helps build wealth for retirement. 

Many people feel like they get a bargain when they find a discount or a 2 for 1 sale. With permanent life insurance, you can actually have one dollar do THREE different things. Your one dollar can buy a death benefit, provide living benefits and build wealth.  It’s true. You don’t have to die to use life insurance! 

For young families having life insurance is important. Whether it is through wealth building permanent life insurance or a more simple term life insurance policy, it’s critically important to protect the family legacy you are building. 

What Are The Different Types Of Life Insurance?

  • Term – Insurance that is designed to pay only a death benefit. There is no cash value build up and the insurance coverage only last for the duration of the term or period chosen. Premiums usually increase yearly.
  • Permanent – Insurance that pays both a death benefit and builds a tax-deferred cash value in the account. This insurance is permanent with steady level premiums.
    • Whole Life – The most conservative type of whole life policy. These policies offer tax-deferred growth, living benefit options, and death benefit with set premiums for as long as you own the policy. 
    • Universal – This type of permanent policy allows you to change both the death benefit and premium during the policy. This is appealing to some who need more insurance early or want to increase their savings within the policy later.  Additionally, if times are tight you can reduce your premium allowing the cash value within the policy to pay premiums. 
    • Index Universal – This type of permanent policy is based on the Universal Life concept with the exception that the cash value account is linked to a market index for growth. Your cash is not directly invested in the market but you get the benefit of market appreciation with no risk of losing principal due to a down market.
    • Variable Universal – This type of permanent policy directly invest your cash into the market (usually through mutual funds).  You have the opportunity for larger returns but also have full exposure for loss of principal if the markets go down. 

Life Insurance "Living Benefits"

Life insurance Living Benefits also referred to as Accelerated Benefit Riders are optional typically no-cost riders offered on most newer policies that allow you to use the death benefit while you are still living. Yes, you read that correctly.  You do not have to die to use your insurance policy!  

Living Benefits are designed to help pay the unexpected and often large health care costs that occur when you have been diagnosed by a physician with a chronic or terminal illness. 

Living Benefit payments are typically paid in a lump sum and can be used for any reason. They are not limited to medical expenses. Features and plans vary by insurance product and state so it is advisable to discuss with a licensed insurance agent for more details.  Living Benefits are not the same as Long Term Care insurance and are not marketed as such. Many people find that having Living Benefits as an option in case of illness or sickness, gives peace of mind their medical bills can be paid.