About Life
Insurance
In it's most
simplistic form, life insurance can be broken down into two broad
categories, defined as Term Insurance and Permanent
Insurance. Both plans have certain pros and cons which need to
be considered when making your decision. See below for more
details.
Business owners may want to consider key person life insurance
for those employees who are vital in keeping your company running
smoothly. Multiple Business owners will need to verify that their
Buy/Sell agreement is properly funded in the event of an
untimely death of one or more of the business partners.
For
more information regarding business insurance options, please call
or email us directly. See the
Contact Us
page for details.
Term Life Insurance
Term life insurance is
coverage that is based on a certain time frame, or term. For
example, most policies have a term length between 10 – 30 years. A
person who is 26 years old, and purchases a "20 year term policy"
will own that policy until age 46...or 20 years. Look at the chart
below for additional advantages and disadvantages.
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Inexpensive.
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For most policies, the premiums
are guaranteed for the length of the term.
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Return of Premium (ROP)
policies are now widely available, which returns ALL premium
dollars to the insured at the end of the term length.
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Once the term is completed,
the policy is terminated, and all premium dollars are lost
(assuming policy is not ROP).
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When policy term is expired,
the renewal of policy is not guaranteed, and if the policy
is renewed, the premiums will be more expensive.
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If the insured dies AFTER the
term policy expires, the beneficiary receives $0 in benefit.
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Underwriting requirements can
be lengthy.
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Permanent Life Insurance
Several types of
permanent insurance products are available, and are generally
categorized into Whole Life, Universal Life, Indexed
Universal Life, and Variable Universal Life. Permanent
insurance, if set up correctly, is a policy that will last
your entire life, assuming all necessary premiums are paid.
Look at the chart below for advantages and disadvantages.
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The beneficiary is
guaranteed to receive a financial death benefit
(assuming the policy is set up correctly during the
initial application) when the insured dies.
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Some policies have a
cash value that grows inside the policy. The owner of
the policy has the ability to use this cash when
he/she feels it necessary (as opposed to term
insurance, where the policy has no financial value to
the insured).
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Flexible premium
payments.
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Typically, less
stringent underwriting requirements than a term
policy.
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