What is the best type of life insurance?

Life Insurance types, like coverage, are based on your individual predetermined needs. You can use our calculator to get an instant quote based on some preliminary information or contact us at compare term for a complimentary consultation. Essentially there are three types of policies, of which there are many variations and nuances. Here is a brief description of each.

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What is Term Life Insurance?

Term Life is usually the most affordable option and therefore the most commonly purchased life insurance policy. With Term insurance you are only paying for the cost of the insurance associated with the death benefit and not building cash value as you do with a Whole Life Policy.

Term policies cover you for a specified term (from 5 to 30 years, in most cases). If you die within the term, your beneficiary receives the stated death benefit of the policy.

Example: say you purchased a $250,000 term life policy for a 20-year period. Whether you die in year two or year nineteen, your beneficiary receives the same amount (i.e., $250,000).

If you are still living at the end of the term, protection ceases unless the policy is renewed. There is no "accumulation" element, or cash value with term insurance, however your premiums are normally less.

For information on policies that do offer an accumulation element see Return of Premium

For a Term Life quote send us some information and we’ll be glad to provide a complimentary quote.

What is Return of Premium?

Is a revolutionary new product that offers both a return of premium as well as a death benefit. Newly introduced, this product bridges the gap between low cost term insurance and permanent insurance.

Return-Of-Premium (ROP Term) is aimed right at one of the greatest consumer objections to regular term life insurance: "I am probably not going to die, and my money will have been wasted." With ROP Term you do not have to waste your money. Unlike regular term, ROP Term rewards you for living by offering a guaranteed return of your total cumulative premium paid, not including substandard and rider charges, if any, will be paid to the policy owner at the end of the level term period.

Example: Male, 35 preferred plus, 500K 30 year term:

Annual premium = $810, Return of Premium after 30 years = $24,300

($810 x 30yr = $24,300) Income Tax Free, because the premiums you paid is after tax dollars.

The ROP Term product series features level-death benefit term plans with fully guaranteed level premiums for the first 15, 20 or 30 years, with coverage expiring at age 95. Four rate bands are available: $100,000 – $149,999; $150,000 – $249,999; $250,000 – $499,999; and $500,000 and higher.

For a ROP quote send us some information and we’ll be glad to provide a complimentary quote.

What is Permanent Life Insurance?

Permanent Life Insurance provides lifelong protection. As long as you pay the premiums, the death benefit will be paid. These policies are designed and priced for you to keep over a long period of time as the name infers. If you don’t intend to keep the policy for the long term, you should consider Term or Return of Premium Term Insurance or if you are unsure consider a complimentary consultation. Send us your contact information and we will schedule a brief consultation.

There are several types of Permanent policies and they are known by a variety of names: Whole or Ordinary, Universal, Adjustable or Variable and Joint Survivorship Life Insurance. These have a cash value or cash-surrender value.

What is Whole Life or Ordinary Life?

Whole or ordinary life is the most common type of permanent insurance. The premiums generally remain constant over the life of the policy and are paid periodically in the amount indicated in the policy.

Whole life insurance policies are valuable because they provide permanent protection and accumulate cash values that can be used for emergencies or to meet specific objectives such as:

• Guaranteed premiums, will not increase over the life of the policy.
• Ability to turn in the policy for the cash surrender value
• Policy loans can provide access to your cash value
• Earnings, and certain withdrawals and loans may qualify for tax-favored treatment
• The death benefit can be reduced to the amount that is paid up
• The cash values may be used to pay premiums for a certain period of time
• The cash surrender value can be used to supplement retirement income

For more information or a complimentary quote please contact us.

What is Universal Life?

Universal life allows, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under a traditional whole life policy. (To increase your death benefit, the insurance company usually requires you to furnish satisfactory evidence of your continued good health.)

For those who feel their needs will change over the life of the policy universal is sometimes a good option as it is easy to increase, decrease or even stop premium payments depending on your needs.

Some of the benefits of a universal life insurance policy are:

• No set premium after the first policy payment
• Death benefit is guaranteed regardless of funding option performance provided minimum payments are made
• The policy can be surrendered for the cash surrender value.
• Policy loans and withdrawals provide access to your cash value.
• Tax incentives may apply
• The policy is flexible in that it can reduced to the amount that is paid up
• You may use accumulated value to pay a portion of your premiums
• Use the equity to supplement retirement income
• Offers a rider for Disability coverage

What is Variable Life or Adjustable Life?

Variable life provides death benefits and cash values that vary with the performance of a portfolio of investments. It is considered a high risk / high reward type of policy as you can allocate your premiums among a variety of investments offering different degrees of risk and reward: stocks, bonds, combinations of both, or accounts that guarantee interest and principal. You will receive a prospectus in conjunction with the sale of this product. Variable policies are normally purchased with the direction of a financial planner and as part of an overall investment plan. Contact us to discuss the opportunities an adjustable life insurance policy can offer.

Some highlights of a Variable or Adjustable Life policy are:

• No set premiums after the first policy year, so as your needs and goals change you may increase, decrease or even stop payments
• Guaranteed death benefit regardless of funding option performance provided minimum required payments are made
• Potential for your cash value to accumulate more rapidly
• Professional portfolio management
• Flexibility to change the funding options in which your net premiums are invested at any time
• Policy can be surrendered for the cash surrender value
• Policy loans and withdrawals provide easy access to your accumulated cash value
• Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment
• Equity may be used to pay premiums for a certain period of time
• Value can be used to supplement retirement income
• Combine with a disability waiver

What is Joint Survivorship Life Insurance?

Joint Survivorship or second-to-die life insurance policies insure the lives of two people. This can be an effective tool in estate planning. The death benefit is not paid to the beneficiary until the death of the second insured. Available as either whole life or universal life policies, premiums are often less expensive than buying two separate life insurance policies. Joint policies can be used to pay for estate taxes and by removing the proceeds of a life insurance policy through the use of gifting policies and third party ownership, a life insurance policy can be used to pay for estate taxes.

Careful planning by your tax and legal counsel, coupled with a properly structured second-to-die life insurance policy, can help you preserve your net worth.

To learn more about Joint Survivorship policies and how they can be an effective part of your estate planning contact us for a complimentary consultation.

When should I buy Life Insurance?