Life insurance is designed to provide for the welfare of the loved ones you leave behind. It helps your family with the financial support you currently provide. Life insurance has the purpose to provide the financial security for your beneficiaries. It pays a lump sum, tax-free payment. These funds can be used as necessary to maintain income, pay for education, take care of debts, and final expenses.
As you can tell, life insurance is a solution for many financial situations:
Final Expenses and Estate Fees
Child Care and Education
Tax Liabilities and Estate Preservation
Term Life Insurance (Temporary)
This is generally purchased to cover short-term needs. A typical circumstance might be to cover parent(s) raising a small family. Term Insurance provides financial proceeds in the event of the death of the insured to provide:
- Cover debts like mortgages, business or personal loans, vehicle financing.
- Replace immediate income.
- Education like college or university.
- Spousal retirement plan
Term Life Insurance is offered for periods of 10, 15, 20 and 30 year terms. The premiums established are guaranteed for that period of time. The coverage can be extended but typically will involve higher rates.
Permanent Life Insurance (Universal Life and Whole Life)
This is coverage for a person’s entire life. Premiums are usually at the same rate for the entire period of coverage, unless the owner decides otherwise. With Permanent Life Insurance the insured is covered for the entire span of their life. No additional medical examinations are required.
Permanent Life Insurance is offered as Whole Life, Participating Life and Universal Life. As explained previously, these policies cover the insured’s life until death. There are added benefits that include investment accounts and cash values. These additional benefits may also carry tax benefits to be called upon during the insured’s lifetime.
This type of policy also offers the advantage to plan for:
- Estate Planning
- Tax benefits including cash value
- Retirement savings
Both Term and Permanent Life Insurance policies can be owned by an individual or by a corporation. Typically corporate policies are used to cover the life of a key person, during buy/sell agreements, and for insured retirement plans.