Life insurance may be one of the most important purchases you'll ever make. In the event of a tragedy, life insurance proceeds can help pay the bills, continue a family business, finance future needs like your children's education, protect your spouse's retirement plans, and much more. If you're considering securing you and your family’s financial future, we would be happy to review your current situation and offer a few ideas on how you can protect it!
Term Insurance is the most affordable type of insurance when initially purchased, is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
GUL, or Guaranteed Universal Life, is Universal Life insurance with a guaranteed level premium and guaranteed level death benefit to age 95 that can be extended to age 121. The policy owner may pay level premiums as with a Term Life policy and be covered with a guaranteed death benefit for the age selected. GUL’s also offer the advantage of “Living Benefits” in case of critical, chronic or terminal illness. Some insurance carriers also offer a GUL with a Return of Premium feature where after 15, 20 or 25 years all or a major portion of premiums paid in are returned to the owner thereby cancelling the death benefit. This is a useful feature if at some point the owner decides that life insurance is no longer needed.
An Indexed Universal Life Insurance (IUL) owner can take advantage of a Market or Equity Index (such as the S&P 500) increase for interest crediting to the cash value of the policy without exposure to risk from a market index decrease. Because there is no risk of market exposure decrease there is a cap placed on the amount of the market index interest crediting. The total amount of cash value is credited with interest based on increases in an equity index (but it is not directly invested in the stock market).
Indexed universal life (IUL) insurance lets the policyholder decide how much cash value to assign to either a fixed account or an equity-indexed account. IUL insurance policies offer a number of well-known indexes, such as the S&P 500 or the Nasdaq-100. IUL’s also offer the possibility of tax deferred cash accumulation while still providing a death benefit.
People who need permanent life insurance protection but wish to take advantage of possible cash accumulation via an equity index may use IULs as key person insurance for business owners, premium financing plans, or estate-planning vehicles.
Whole Life Insurance is a life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against. As the most basic form of cash-value life insurance, whole life insurance is a way to accumulate wealth as regular premiums pay insurance costs and contribute to equity growth in a savings account where dividends or interest is allowed to build-up tax-deferred.