Life Insurance

Types of Life Insurance

Term Life: Insurance which gives temporary protection for a specific time period such as 1, 5, 10, 20 or 30 years. Premiums can be less expensive than Universal Life and Whole Life.

Universal Life: Insurance which gives permanent protection that matures at insured's age 100 (some policies at a higher age). The policy is built with a flexible premium schedule, a guaranteed minimum interest rate that is credited to the cash value, and loan values.1

Indexed Universal Life: Insurance which gives permanent protection that matures at insured's age 100 (some policies at a higher age).  Policy is built with a flexible premium schedule, a guaranteed minimum interest rate and/or an index rate that is credited to the cash value, and loan values.   

Whole Life: Insurance which gives permanent protection that matures at insured's age 100 (some policies at a higher age). The policy builds cash, loan, and non-forfeiture values.1

Why life insurance?

Most of us have life insurance through our employers and it is considered “affordable”. The question is what coverage will I have when I leave that employer or retire? Is it a portable policy or do I have to buy it now at my current age? Does it cover my assets, family needs, debt, or final burial expenses?

Uses of life insurance:

- Create an estate.
- Protect an estate.
- Provide cash value for college funds, emergency needs, down payment on a house.
- Provide cash value for retirement income or long term health care needs.
- Final expenses. (Average cost $7,000 - $15,000)

Riders Available:  Longterm care, disability income, accelerated death benefit, waiver of premium

How much insurance do you need?

Life insurance helps ensure that your family and loved ones are protected against financial difficulties in the event of your death. Combined with investments, retirement and estate planning, life insurance is a fundamental part of a sound financial plan.

To determine how much you need to replace your lost income, deduct the total income that would be lost upon your death from the sum required for your family’s ongoing financial stability. Be sure to include financial needs such as the mortgage, college funds and running a household. Another rule: 8 times your salary. The solution to your particular needs may entail a combination of several policies, and the combination may change as your situation changes.

Is life insurance pay-out taxable?

Cash value used for college funds or first time home buyers is tax free. Cash value principle is tax free but any interest earned is taxable. The death benefit to your beneficiaries is tax free.

Statistic: Nearly 50 million Americans lack adequate life insurance coverage. A recent study of widows and widowers found that most had to make difficult financial adjustments after their loved one dies. These included having to work additional jobs or longer hours, borrow money from friends and family, withdraw money from savings and investment accounts, and move to smaller, lesser expensive housing. Source: Life and Health Insurance Foundation for Education. www.life-line.org 2004

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