Individual Life Insurance

Buying Life Insurance

If there are individuals who depend on you for financial support, or if you work at home providing for your family you need life insurance. As young parents, life insurance is essential to protect a spouse in the event of a sudden death of the other spouse. The everyday costs of raising children and paying for kid’s college education can be covered by a life insurance policy in the event of a death. Older people may also need life insurance to protect a surviving spouse against the possibility of the couple’s retirement savings being depleted by unexpected medical expenses. Wealthy individuals with large assets can use life insurance as a tool to help reduce the effects of estate taxes or to transfer wealth to future generations.

Term Life

Term Insurance is a temporary and cost-effective coverage with the opportunity to change should your needs change.

Term insurance provides:

  • An affordable way to get maximum coverage
  • To cover specific financial responsibilities like a mortgage or college expenses
  • Can provide guaranteed protection for 10,15,20, or 30 years with the option to convert or renew the policy depending on your age.
  • If you choose to convert a term policy to a permanent insurance policy you would not be required to take a medical exam or provide proof of insurability. The premiums would change to reflect the original medical rating class along with the age of the insured at the time the conversion took place.
  • Term policies can be renewed after the original term period expires, although the premiums will be much higher and will continue to rise each year.
  • As with other Life Insurance Policies the death benefit from a term policy is tax-free.
  • There can be several optional riders added to a term policy including Disability Waiver of Premium, Convertible Waiver of Premium, and Long Term Care Purchase Option. These riders can differ amongst insurance carriers and specific policies.

Whole Life Insurance

Whole Life Insurance is the simplest form of permanent life insurance. It features lifelong protection with guaranteed premiums, death benefit, and cash value. Permanent Insurance is more expensive then term insurance but is guaranteed until the person dies or the policy is cancelled.

Some positive features of Whole Life Insurance are:

  • Fixed annual premiums that will not increase
  • Guaranteed death benefits
  • Cash Value accumulation that grows tax-deferred
    • You can take out the cash value of any insurance bought with dividends or any dividends left to earn interest. You can also borrow against the cash value in your policy and not have to worry about the policy lapsing.
  • Annual dividends that can be used to purchase more insurance or pay premiums
    • Dividends can help you keep up with inflation by purchasing more insurance
    • As you get older and have less access to income these dividends can help pay a portion or all of the premiums needed to keep the policy active.
  • Tax advantages
    • As with other insurance policies the proceeds from a Whole Life policy are free of federal or state income taxes. With the right planning they will also be free of estate taxes.
    • The annual gains associated with the cash value will grow tax-deferred allowing your account to grow faster then it would be in a taxable investment account.
  • There can also be several riders associated with Whole Life policies including but not limited to Paid up Additions Rider, Long Term Care Purchase Option, and Disability Waiver of Premiums Benefit. These riders can differ amongst insurance carriers and specific policies.

Universal Life Insurance

A Universal Life Policy provides flexibility that allows you to change, within limits, the death benefit and the timing and amount of your premium. You can build your policy’s cash value, or pay a lower premium and focus more on guaranteed protection. Universal Life policies typically offer a guaranteed return on cash value.

Some positive features of Universal Life Insurance are:

  • Protection that can last a life time
  • The flexibility to choose between protection plus cash value accumulation or affordable guaranteed protection