It’s not a matter of If but When…..

Life Insurance is one of the most versatile and flexible protection products available. Life Insurance is often times misunderstood and certainly it’s not something most of us are comfortable talking about.  Let’s call it what it is, it’s death insurance. Ok, the cat is out of the bag, the cards are on the table.  Why do people need this type of protection? It’s really pretty simple if suddenly you weren’t in the picture would your loved ones be able to afford the life style that you have helped create for them? More often than not the answer is no. In today’s society it takes two incomes to support a family so if suddenly your income was not available how could your family survive financially. Some of the most current stat show that anywhere from 23-68% of Americans are living paycheck to pay check. This is a staggering number.  We know that YOU can never be replaced, however your income can. This is really the basic concept of life insurance. Protecting your income.  Earlier we mentioned that life insurance was a versatile and flexible protection product. Life Insurance can be used as a mortgage protection plan, college education funding, private retirement plan, legacy ensuring and many more scenarios. 

There are 3 types of Life Insurance they are TERM, UNIVERSAL and WHOLE LIFE. All three have some common features but their application is broad. The policy that best suits you will be dependant on what you are wanting to accomplish with the policy. Here are some basics about the 3 different types. 

Term Life -

•  Premium payments are level for designated length or term (if selecting a level term policy)
•  Temporary as it is for the designated time (term),  i.e., 10, 15, 20 years, after that time  the coverage will expire
• Lowest premium payments for the highest amount of insurance for your money
• Temporary death benefit; it is possible to out live the “term”
• Suitable for temporary needs like college planning, mortgage insurance or as your first, least expensive coverage

Universal Life -

•  Flexible or guaranteed premium payments
• Permanent or temporary (depending upon your choice)
• Policy builds cash value however it is dependent on the interest rates, amount of premium paid, and certificate charges
• Lowest priced permanent death benefit; meaning when you pass the policy will be enforce  
• Opportunity to build cash value
• Higher premium compared to term.
• Very flexible.
• Cash value can be used for different purposes

Whole Life -

• Guaranteed premium payments
• Guaranteed permanent until you die
• Cash value is guaranteed; set interrest rate; Dividends may be awarded but are not guaranteed
• Permanent death benefit and guaranteed cash value
• Higher premium compared to term.
• Very safe, conservative addition to a retirement portfolio

As you can see there are certain incidences where one type of policy would be more approprate than the other based upon the situation. Please contact a professional to ensure the policy you own is correct for you and your family.