Though we don’t like to talk about it, death is a 100% certainty. When that happens, a life insurance policy exists to protect your family’s financial future. There are various amounts of coverage that can be used for things like paying off a home, paying off debt, burial expense – as well as affordable coverage for a period of time. And while you may have coverage through your employer, please know that policy is only in force if you stay in the same job. Our specialists will help you determine what amount is appropriate for you and give you some options to consider.
This is essentially temporary life insurance. It is usually purchased with a specific time period in mind. In today’s marketplace 10, 15, 20 and 30 years are the most popular choices. The price is fixed and guaranteed for the period of time chosen. The longer the time period, the higher the premium. At the end of that fixed premium period, the cost will jump dramatically and continue to do so each year.
Pros: Lower initial premium than permanent options, easy to understand.
Cons: Becomes very expensive if needed after the initial term period ends, does not address possible need for coverage beyond the initial term period and conversion option may not offer an attractive solution, limited living benefits are available, no cash value available unless Return of Premium rider is elected at purchase.
This plan offers the lowest cost guaranteed level premium for lifetime coverage. Also, the premium can be “dialed back” to guarantee the death benefit for shorter time periods, but still longer than term life plans will usually go. It can be designed as a planned premium for life or for a shorter time frame such as 10 years, 20 years or to age 65.
Pros: Lower premiums than Whole Life while maintaining lifetime death benefit guarantee, outstanding living benefit riders available on many plans.
Cons: No substantial cash value buildup or availability, not much flexibility compared to current assumption universal life plans.
Though there are many variations, in general this product has a fixed premium for a set period of time, provides guaranteed lifetime coverage AND guaranteed cash value build-up for life, enhanced cash value and a increasing death benefit on projected basis. The death benefit and cash value guarantees usually mean a higher cost than other types of plans. It is a popular offering among Mutual (Participating) companies, but is also available from some Non-PAR companies.
Pros: Lifetime guaranteed death benefit and guaranteed cash value build up, possible enhanced cash value build up and possible increasing death benefit, requires little or no ongoing review and management.
Cons: Required premium is higher than most other types of life plans, premium is generally not as flexible as IUL and traditional universal life plans.
This plan is designed to have a flexible premium, provide permanent life insurance coverage and potentially enhanced cash values above what might be realized in a traditional universal life or whole life plan. Some of these plans also have living benefit options included or available as riders.
Pros: Flexible premium, possible low premiums for lifetime coverage, possible enhanced cash value buildup for access later in life, living benefit options are sometimes available.
Cons: Death benefit guarantees are limited to less than lifetime – sometimes substantially less, cash value and often the death benefit are projections determined by index returns and the company determined cap or participation rate, cash values can be severely effected by company’s decision to change internal policy costs, requires ongoing policy owner management.