Life Insurance
There are basically two types of Life Insurance; they are “TERM” and “PERMANENT”
Why would I consider “Term insurance”??
Term insurance is usually purchased for a specific reason. Term can be offered as Term-10, 20 or 30. Depending on which term you choose, your premiums are guaranteed to remain level for the first 10, 20 or 30 years. Here are just a couple of reasons why you might consider purchasing Term Insurance.
- You may have small children and would like to be sure that if you, or your spouse were to decease prematurely, the other spouse would have the funds necessary to educate your children.
- You may have a mortgage and want to insure that you have enough life insurance to cover your mortgage balance
- You may be on a very tight budget and are looking for a satisfactory amount of life insurance with an affordable premium.
Why would I consider “Permanent Insurance”??
With Permanent Insurance your premiums and the face amount of your life insurance are guaranteed to remain level for all of your life. Permanent Insurance will cost more than Term Insurance when you purchase it. This is due to the fact that the company takes the extra premiums in the early years to help fund the premiums in the later years. He are a couple of reasons why you might want consider purchasing “Permanent Insurance”.
- The main reason is “Estate Preservation” it’s no secret people are living longer, by purchasing Permanent Insurance, it’s a guaranteed way of having sufficient funds available for final expenses, as well as covering the tax repercussions incurred when you leave your property and/or investments to your children. Life Insurance is a cost effective way of covering all taxes charged to your estate after death.
- If your budget allows for it, you may choose to fully pay up your Life Insurance in a specific period of time; the most popular being 20 years. Which means, you will have a fully paid up policy after 20 years and will never have to make future premium payments for the rest of your life.
UNIVERSAL LIFE
(This is another form of Permanent Insurance)
Why would I consider “Universal Life”??
Universal Life insurance is permanent insurance with an investment portfolio built into the policy. You pay excess premiums, in an amount of your choice, these excess premiums are invested in either segregated funds or guaranteed investment accounts. You choose the group of funds based on your own personal risk tolerance.
The “cost of insurance” and the “face amount” of your life insurance is guaranteed for life. Universal Life insurance policies can be set up to pay the “face amount and fund value” at time of death, if you choose this option, the fund value within your policy would be paid out as Life Insurance. As you may be aware, Life Insurance proceeds are TAX FREE, so consequently, you will pay no tax on your investment.
Term-100
Although this insurance is called “TERM” it really is permanent insurance, simply because it offers level insurance premiums to age 100. Term-100 policies are ideal for people who are age 50 and over. These policies can be purchased with or without “Cash Surrender Values”. You may also choose the option of having a fully paid up policy after 20 years