Life Insurance
About Life Insurance
Life insurance is an essential part of financial planning. One reason most people buy life insurance is to replace income that would be lost with the death of a wage earner. The cash provided by life insurance also can help ensure that your dependents are not burdened with significant debt when you die. Life insurance proceeds could mean your dependents will not have to sell assets to pay outstanding bills or taxes. An important feature of life insurance is that no income tax is payable on proceeds paid to beneficiaries.
Choosing A Plan
Buying life insurance is not like any other purchase you will make. When you pay your premiums, you’re buying the future financial security of your family that only life insurance can provide. Among its many uses, life insurance helps ensure that, when you die, your dependents will have the financial resources needed to protect their home and the income needed to run a household. Choosing a life insurance product is an important decision, but it often can be complicated. As with any other major purchase, it is important that you understand your needs and the options available to you. The main types of life insurance available are term and permanent.
Permanent Insurance
Permanent life insurance provides lifelong protection.
Term Life Insurance
Term life insurance provides protection for a specified period of time.
How Much Insurance Do I Need?
Although there is no substitute for a careful evaluation of the amount of coverage needed to meet your needs, one rule of thumb used is, buy life insurance that is equal to five to ten times annual gross income at a minimum.
If you want to be more precise, take the time and complete the Needs Analyzer.
Life Events
Take a moment to think about how your life has changed just in the last year. Chances are, your life is not the same as it was last year, and neither are your insurance needs. Let us help you make the most of the present and prepare for what lies ahead.
Types of Life Insurance
Permanent Insurance
Permanent Insurance is Life insurance that is kept in force for a person's whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed* as long as the scheduled premiums are maintained. The variable in a whole life policy is the dividend which could vary depending on how well the investments and other business criteria of the insurance company are doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, values are paid back to the policyholder in the form of dividends. Policyholders can use the cash from dividends in many ways. It can be used in three main areas: to lower premiums, to purchase more insurance or to pay for term insurance.
Term Life Insurance
Term life insurance provides protection for a specific period of time. It pays a benefit only if you die during the term. Level term products are the most popular plans purchased today. The level term can be from 10 years to 40 years. The premium and death benefit are designed to stay level during the term of the contract. The premiums can be either guaranteed* or not guaranteed. When purchasing a level term life insurance policy be sure you are aware of the guaranteed* premium period. Once you have been approved and placed the policy in force with the first payment, the insurance company is obligated to keep the policy in force as long as you keep paying the premiums. You are not obligated to pay, but once you stop paying, the policy will lapse after usually a 30 day grace period. Some term insurance policies can be renewed when you reach the end of a specific period which can be from one to 40 years. The premium rates increase at each renewal date. Most policies require that evidence of insurability be furnished at renewal for you to qualify for the lowest available rates.