Life Insurance

Life Insurance Overview

Life insurance has many variables and decisions, such as, how much is enough and what type of policy is the best for you and your family. With this in mind we have put together a quick reference guide with definitions that will familiarize you with the common terms used in the breakdown of coverages available.

Needs vary for life insurance and your choices can be Term Life, Universal Life, Whole Life, Variable Whole Life or a Variable Universal Life policy. Each type of insurance has its advantages.

Depending on the life or health insurance needs, whether it be on an individual or group basis, our agency will provide you with the most comprehensive plan based on your individual or group current and future financial needs.

Life Insurance

Their are many types of life insurance to fit individual needs and circumstance. The following are some of the basic types of life insurance available.

Term Insurance- The simplest form of insurance. You purchase coverage for a specific price for a specified period. If you die during that time, your beneficiary receives the value of the policy. There is no investment component.

Whole Life- Similar to term, but you purchase the policy to cover your “whole life” not just a set period. Premiums remain level throughout the life of the policy, and the company invests at least a portion of your premiums. Some firms share investment proceeds with policyholders in the form of a dividend. Many companies will offer “a relatively low guaranteed rate of return,” but in reality pay at a rate in excess of the guarantee.

Universal Life- You decide how much you want to put in over and above a minimum premium. The company chooses the investment vehicle, which is generally restricted to bonds and mortgages. The investment and the returns go into a cash-value account, which you can use against premiums or allow to build.

  • With some policies, sometimes called Type I or Type A, the cash account goes toward the face value of the policy on the death of the policyholder.
  • With a second variety, sometimes called Type II or Type B, the beneficiary receives the face value of the policy plus all or most of the cash account.
  • While Type II is meant to provide a partial hedge against inflation, it demands higher premiums as you get older than Type I.

A variation of a universal policy, often called universal variable life, allows policyholders to choose investment vehicles.

Variable Life- With a variable policy, there is usually a wider selection of investment products, including stock funds. As with a universal policy, returns on investments can offset the cost of premiums or build in the account. And depending on the type of policy, the beneficiaries will either receive the face value of the policy or the face value plus all or part of the cash account

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 Note: As stated in our “Terms of Servied” (TOS) agreement, descriptions of insurance coverage on this web site are for informational purposes only and may not apply, or be included on your policy. Please contact us to confirm coverage provided on your insurance policy or policies you are contemplating purchasing.