Individual Life

Who needs life insurance?
Everyone does. Life insurance is designed to help you deal with the financial impact of some of life's unexpected events. It ensures that when you die your family will have the financial resources it needs to meet its expenses. Many people also purchase life insurance to accumulate funds for future needs, including retirement income, college funding, or simply a fund for future emergencies or opportunities.

Life insurance serves an important role in the financial protection of men and women ... single or dual income households ... and even for children. In addition to replacing the lost income of a wage earner, life insurance can also ensure the availability of child care and household maintenance. For young people the need for life insurance is not measured by financial obligations but by what the future might hold. Buying life insurance when children are young will offer lower premiums and guarantee insurability.

What types of life insurance are available?
There are two basic kinds of life insurance, term and permanent. Many variations of these standard forms of life insurance also exist, probably the most popular being universal life.

Term Insurance
Term Insurance does just what the name implies ... provide protection for a specific term of one or more years. Since protection is only provided for a specific time period it is considered temporary protection.

Death benefits are paid only if you die within the term of years for which the policy is written. Term insurance can usually be renewed, often without a medical examination. But premiums will be higher each time you renew because you are older. Term insurance provides you with the greatest amount of coverage per premium dollar. Most policies are "convertible," which means the policy can be traded for permanent life insurance protection. Premiums for the new policy will be higher than those paid for
the term policy. 

Permanent Insurance
Permanent life insurance provides you with protection for as long as you live. Premium costs are averaged over your lifetime, so the premium does not increase as you get older. The premiums are higher than what you would pay for an equivalent amount of term insurance. However, permanent insurance is considered more economical when compared to continuously renewing term insurance at higher premium rates.

The most basic type of permanent insurance is "whole life." Whole life policies develop cash values on a tax-deferred basis. This cash value can be used for a variety of purposes, including: 

• Using the policy as collateral and borrowing up to the current cash value. This is useful for funding short-term obligations. If you die before the loan is repaid, the amount owed and interest is deducted from the life insurance proceeds. 
•  Payment of premium to keep your policy in force. You may authorize the insurance company to borrow from your cash value to pay the premium due. 
•  Use the cash value to fund a paid up policy at a reduced level of protection if you wish to stop making premium payments completely. 

The cash value of the policy is always available if you elect to cancel the policy. You pay taxes on the cash value only if it exceeds the amount of premiums you paid into the policy.

Universal Life
Universal life insurance combines features of both term and permanent insurance. Universal life not only offers life insurance protection, it also accumulates cash which is credited with interest earnings. The amount you earn depends on current interest rates. 

The premiums you pay are added to the cash accumulation portion of your universal life policy. Each month a deduction from the account value is made to provide for life insurance protection and other benefits and riders. An administrative fee is also deducted from the cash accumulation.

Universal life is a type of flexible premium policy, allowing you to vary the timing and amount of your premium payments every year, or even skip a premium payment. Insurance continues as long as there is enough money in the cash accumulation to pay for the insurance charges. You can obtain cash from your universal life policy by borrowing or withdrawing from the account value.

For a free, no obligation Life Insurance needs analysis, give one of our agents a call at 800-326-5290. 

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