Life Insurance

There are basically 3 kinds of Life Insurance, all with specific security offerings in mind. Term Life, Whole Life, and Universal Life. The descriptions below are very basic. There are riders and extras offered with many products to help people accentuate the policies to suit their needs.

Term Life: is exactly what the name says. It lasts for a certain term (period of time) and then it goes away or the price increases dramatically. Term Insurance is meant to protect you and your family while you are building your life and your family. It was not that long ago (in the insurance time clock) that mom stayed home and raised the children and dad went to work. If something were to happen to dad, mom and the kids would be in a bad way. Today we have two income households, so it is common to see two income replacing term policies in the home. Term insurance is generally LARGE amounts of insurance for a small affordable premium. With today’s prices, a 25 year old could get $300,000.00 in term insurance for $15.00 to $20.00 per month.  It is truly a security blanket. As we age, these rates go up and become less affordable. Term life (generally) does not build cash value however, there are several riders available to enhance these policies.

Whole Life: again, is exactly what the name says. It can protect you from the time you purchase it, for the rest of your life. Whole Life builds cash value that continuously grows and can be reinvested. Some of these policies are available with limited pay such as “paid up in 10” “Paid up in 20” or “Paid up at 65.”

There are also policies that pay dividends that can be used to pay your premiums (disappearing premiums) or they can be used to purchase additional paid up insurance, growing your initial investment.

There is a special form of Whole Life Insurance called Final Expense Insurance, designed generally for those over the age of 50. They are simplified issue (very few questions asked in a window of time) or guaranteed issue (no health questions) and are generally available from $5,000 to $25,000 face amounts. Final Expense Insurance is also highlighted in its own section on this website.

Universal Life: also called “Flexible Premium Permanent Life,” is a customizable policy. It builds a cash value that is paid interest. This is also an investment as the cash value in these types of policies can be rolled in to other products such as other Life products or Annuity products.