Life insurance could be the most necessary and beneficial protection out there. There’s not much that’s guaranteed in life but dying certain is one of those guarantees. With death the question isn’t if but when. There are many forms of life insurance and one is not necessarily better than the other however each serves a¬†purpose. Below you will find a simple chart of highlights with some important nuggets of knowledge along the way. There are three major types of life coverage and within each of them are endless ways to modify it. Life insurance needs is something that should be reviewed with a licensed agent and should be reviewed periodically as life changes such as new family additions, a change in income, assets or needs.

Type Whole Term Universal
Duration Permanent Temporary Permanent*
Premiums Highest Lowest Middle
Purpose Final Expense
Burial Expenses
Passing Money to Beneficiaries
Donating
Mortgage, Debt, Income or Loan protection All of the Above
Underwriting Easy-Moderate Moderate-Difficult Moderate-Difficult
Cash Value Yes No Yes
Tax-Free Benefit Yes Yes Yes
Avoids Probate Yes Yes Yes

For more information on Life Insurance, please contact us.

*As long as it is properly funded.

Most of you have heard of Child Whole Life Insurance policies such as the baby food brand but did you know there are way better kinds of policies out there? I’d like to take this opportunity to introduce you the IUL : Indexed Universal Life. While IUL policies can be extremely complex and incredibly customized, the standard policy has incredible potential. If I had to describe these policies in one sentence it would go something like this. An IUL is designed to act like a Whole Life policy without the Cash Value cap. What does that mean? Lets use an example where someone has a $10,000 Whole Life policy. The policy will endow at 100 or 121 and be worth $10,000. At this point the insurance company will most likely write a check for $10,000 and terminate the policy. By design a standard Whole Life policy’s cash value can never exceed the death benefit. An IUL however will raise the death benefit once the cash value starts to exceed the original death benefit.

This concept is an incredible benefit that has made the IUL one of the most popular policies sold today. These types of policies however are much more medically underwritten than standard Whole Life policies therefore they must be applied for while you’re young and healthy. Also, the younger you apply the lower your cost of insurance will be and also your premium. These policies can be used not only as high value death benefits for the insureds family but also as a way to generate tax-free money. Anyone and everyone who can medically qualify for such a policy should.

Unfortunately all too often I meet folks in their 70’s or 80’s who now realize they need Life Insurance and never imagined or prepared themselves for what a policy and that age can cost if they can even qualify. Just to give you an idea, a $10,000 Whole Life policy for someone in their 70’s can be anywhere from $60/mo. to well over $100/mo. depending on age, health and gender. Meanwhile if you start young, a $100,000 Whole Life policy can cost less than $50/mo. depending on age. This is why it’s crucial to start one for your kids as soon as you can. They will greatly benefit for the rest of their life without even understanding why you did this until they themselves grow old.

 

For more information on Index Universal Life or Child Whole Life policies please contact us.