Insuring a Bright Future
Life Insurance
Term Coverage
A term policy is straight insurance with no investment component. You're buying life coverage that lasts for a set period of time provided you pay the monthly premium. Annual-renewable term is purchased year-by-year, although you don't have to requalify by showing evidence of good health each year.
Whole Life
Whole-life policies, a type of permanent insurance, combine life coverage with an investment fund. Here, you're buying a policy that pays a stated, fixed amount on your death, and part of your premium goes toward building cash value from investments made by the insurance company.
Guaranteed Universal Life
These policies promise a certain death benefit, and payments don’t change. There’s typically little or no cash value within the policy, and insurers demand on-time payments. Missing a payment could mean you forfeit the policy. And since there’s no cash value in the policy, you’d walk away with nothing if you forfeit. If you’re sometimes late with bills, this is not the product for you. In addition, consider that future financial or health problems could cause you to miss a payment.
Indexed Universal Life
Indexed universal life insurance links the policy’s cash value component to a stock market index like the Standard & Poor’s 500. Your gains are determined by a formula, which is outlined in the policy.
Variable life
Variable life and variable universal life are permanent policies with an investment fund tied to a stock or bond mutual-fund investment. Returns are not guaranteed.
Final Expense
Final Expense insurance provides peace of mind. When our time comes, the last thing we want to do is add stress to our loved ones. Our last wishes are for them to remember the good in us and for them to live happy and joyous lives. Final Expense insurance can be used to cover your service expenses, mortgage payments, personal bills, etc.
ADDITIONAL LIFE INSURANCE INFORMATION
The two primary types of life insurance policies are term life insurance and permanent (whole) life insurance.
TERM
Term life insurance offers coverage for an agreed-upon amount of time. This can range from shorter terms, like 10 years, and to the longer terms offering coverage for up to 20, 25, or 30 years. If you pass away during the term of your insurance policy and it is still in effect, then your beneficiaries will be paid a death benefit payment. You might consider a term life insurance policy if you want coverage during crucial periods in your life. This might be when your child is growing up or while you are paying off your mortgage.
Term life insurance is often more affordable than permanent life insurance. However, if you die after the end of your policy’s term, your beneficiaries won’t receive death benefits. It’s important to note that term life insurance tends to cost less if you buy your policy while you are young and healthy as compared to buying a policy later in life. Many term life insurance policies also require that you undergo a medical exam in order to gain coverage.
Three types of term life insurance include:
- Yearly renewable term
Premiums start low but grow larger every year
- Level term
Premiums remain the same for a specific amount of time (for example, 20 years) and then begin increasing
- Step rate term
Premiums stay flat but then increase after certain increments of time (for example, every five years)
Most quality term policies can be converted into a whole life policy using the same health info when you originally applied. Pacific's agents will make sure you know all of your options and how your plan works.
WHOLE
Permanent life insurance policies remain in force for the rest of your life, as long as you continue paying your premiums. This is what makes the coverage "permanent." These types of life insurance can also build value through a cash savings component.
Permanent life insurance policies can:
- Build in tax-deferred cash value
- Help you secure a loan, based on your policy’s value
- Potentially pay out dividends to policy holders
As mentioned before, permanent life insurance plans often have higher premiums than those for term life insurance.
Three types of permanent life insurance policies include:
- Whole life
Premiums and benefits are typically guaranteed and are established when you buy the policy
- Universal life
Premiums and death benefits can be adjusted throughout your life
- Variable life
Your cash reserve is tied to investments such as stocks, though policy levels remain the same
Deciding on which type of life insurance might be the best fit for your needs will depend on your financial assets and your family's situation. Pacific Insurance Agency's Financial Services Professionals will give you the information you need to make educated decisions.