Why
Life Insurance?
A life insurance policy can help cover expenses and replace income in the event you or your loved should pass. It can be used to replace your salary, pay college tuition, make mortgage payments, and even help cover gaps in your retirement income.
How does life insurance work?
With life insurance, you make premium payments so that in the event of your passing, your loved ones and beneficiaries will receive the death benefit proceeds from the policy. There are two types of life insurance, term insurance which is for a specific period and permanent insurance which is for life.
Do I need life insurance?
If you have anyone that depends on you financially or if you don’t want to leave your loved ones with burial costs or debt, then the answer is yes! Even if you’re just starting out, you may want to lock in an affordable rate for when you have a family, the different types of life insurance can help with that.
TERM LIFE INSURANCE
Term life insurance is one of the most affordable types of life insurance you can buy. It is the most affordable way to protect your family’s financial security if something were to happen to you. Term Life Insurance can provide coverage for a specific period, or “term” for example, 10, 15, 20, 25 or 30 years or to a specific age, such as age 80. Once that term ends, so does your coverage. That means, your loved ones won’t receive a payment from your policy should you pass after the term ends.
While term life insurance doesn’t build up a cash value like permanent (also known as whole, or universal) life insurance, it’s an especially smart and inexpensive way to:
- Gain peace of mind during the years when you’re building a nest egg for retirement
- Paying off a home mortgage
- Putting away funds for your child’s college tuition
WHOLE LIFE INSURANCE
Whole life insurance is a permanent life insurance policy, which gives you guaranteed protection for your loved ones that lasts a lifetime. Unlike term insurance, whole life insurance ensures a guaranteed death benefit, which means that your loved ones will receive a lump sum of money regardless of how long you live. With whole life insurance, you earn guaranteed cash value, which you can use to help pay for college, supplement your retirement income, or for emergencies.1
Participating whole life insurance are eligible to earn dividends2 which can be used to increase the death benefit and the cash value of the policy. There are other options you could choose, such as using dividends to help pay premiums or receive them in cash.
1 Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.
2 Dividends are not guaranteed.
Universal LIFE INSURANCE
A universal life insurance policy offers permanent life insurance with flexible premiums. This allows you to adjust the amount you pay each year – even month to month – As long as there is enough value in your policy to cover the cost of insurance and administrative charges, you can decide how much premium to pay within certain limits. This means you have the option to pay extra sometimes, and less when you might need to. You may also choose a policy with a guaranteed death benefit, which means your family is guaranteed to receive a lump sum of money in the event of your passing
Depending on the premium you choose to pay, your account may build value. And if your account builds enough value, you can borrow from your policy for any reason you choose.1
1 Access to account values through borrowing and/or withdrawals will reduce the cash surrender value and may reduce the policy death benefit.
Taking a policy loan could have adverse tax consequences if the policy terminates upon lapse or surrender or before the insured’s death.