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Life Insurance comes in many different forms. Term Life, And Permanent Life (Par Whole Life, And Universal Life).
Which one is right for you? Finding the answer depends on several factors to which sitting down with an advisor will provide you to guidance and cost savings you need.
Term Life Insurance
What is Term Insurance?
Provides low cost protection for a defined timeframe when your coverage needs are high but cashflow is limited. Common term coverage comes in 10 and 20 year terms however there are some companies that offer 25 and 30 year terms as well. The cost will never increase during the term and should you pass away during the term your named beneficiaries receive the death benefit tax free.
With term life insurance, you have options to convert to the other types of permanent coverage without a medical.
Why do I need Term Life Insurance?
Term Life Insurance is a great solution for:
- Loss of income replacement
- Mortgage Insurance
- Other Debt
- Children’s Educational Costs
Already have term coverage but possibly require additional coverage?
Insurance companies price insurance with different banding rates. Basically, that means the more you death benefit you purchase the lower cost per thousand you are charged so an option for you might be to combine all of your coverages into one designed plan, which could help you save on monthly costs of numerous plans.
Permanent Life Insurance
This category of Insurance comes in 2 forms. Par Whole Life and Universal Life. Provides you lifelong protection at a level cost for the duration of your life. Both options provide an opportunity for tax advantaged cash value growth and have an opportunity to become paid up policies depending on how you set the plans up.
Par Whole Life
What Is Par Whole Life?
Participating Whole Life (Par) provides protection with potential to grow money tax sheltered inside your policy. The insurance will provide coverage for life if your premiums are paid current on the policy due date. Cost of this type of plan and coverage are guaranteed for life. Because you are participating in the company’s potential dividends, when a dividend is declared you have options to use that dividend to:
- Purchase additional coverage
- Reduce premium payments
- Earn Interest inside account
- Supplement retirement income
Why Is Par Whole Life Right For Me?
The old saying of there are two things guaranteed in life; death and taxes. If you are wanting coverage for when you die then this may be right for you. If you are looking for coverage for life or to build wealth for while you are living or for future generations then consider this type of plan.
Insurance is price based on several factors such as age, health lifestyle etc. By setting a plan like this up while you are young you will lock in premiums at a lower rate and will allow a long timeframe to grow your money inside the plan as well as the death benefit.
Universal Life insurance is designed for those who want flexibility in a plan. The premiums deposited goes into a policy fund that’s used to pay for the cost of your insurance coverage. The options include a yearly renewable term and level cost coverage (Term 100). The remaining balance is invested on a tax advantaged basis. There are a variety of investment account options to choose from based on an individual’s objectives and risk tolerance.
How well your money grows depends on how well your chosen investments perform. Money held inside the account can be used to make future premium payments or a source of future savings. Account values can be borrowed against, withdrawn or left intact and added to the death benefit tax free.
Why Do I Need Universal Life?
If you are looking for coverage for life but would like added flexibility in your plan. If you would like to build wealth as well have the power to decide where you park your excess funds based on your goals and objections. If you would like to periodically change things within your plan from time to time based on changes in your budget then this may be the plan for you.
Other Life, Health & Wealth Management Coverage Options