Life Insurance
Term Life Insurance
Term Life Insurance is a type of life insurance policy that provides coverage for a specific period, or “term,” such as 10, 20, or 30 years. It is a straightforward and affordable option for those seeking substantial coverage at a relatively low cost.
Key features about term life insurance:
- Coverage Period: The policy pays a death benefit only if the insured person passes away during the specified term.
- Premiums: Term life insurance typically offers lower premiums compared to permanent life insurance (such as whole or universal life) because it focuses solely on providing protection, without a savings or investment component.
- Renewability: Most policies allow for renewal at the end of the term, usually at a higher premium, Some policies also offer the option to convert to a permanent life insurance policy.
- Death Benefit: The death benefit is the amount paid to beneficiaries if the insured person dies during the term. The policyholder selects this amount when purchasing the policy.
Permanent Life Insurance
Permanent Life Insurance is a type of life insurance policy that provides lifelong coverage. Unlike term life insurance, it does not expire after a set period. Permanent life insurance can be an important tool in estate planning, helping to cover estate taxes or provide an inheritance for heirs, making it a versatile financial planning tool.
Key features of permanent life insurance:
- Lifetime Coverage: Permanent life insurance offers coverage for the insured’s entire lifetime, ensuring that a death benefit is paid to beneficiaries regardless of when the insured passes away.
- Cash Value Component: Many permanent life insurance policies include a savings or investment component known as cash value, which grows over time on a tax-deferred basis over time. The policyholder can access this cash value through loans or withdrawals.
Types of Permanent Life Insurance:
- Whole Life Insurance: Features fixed premiums, a guaranteed death benefit, and a guaranteed cash value that grows at a set rate, offering stability and predictability.
- Universal Life Insurance: Provides flexibility with adjustable premiums and death benefits, while the cash value can fluctuate based on market interest rates.
No-Medical Life Insurance
No-Medical Life Insurance is a type of life insurance policy that does not require the applicant to undergo a medical exam as part of the underwriting process. This makes it a quicker and easier option, especially for individuals who may have difficulty qualifying for traditional policies due to health issues.
Key features of no-medical life insurance:
- No Medical Exams: Applicants are not required to undergo medical exams, blood tests, or provide medical records.
- Coverage Amounts: No-medical policies typically offer lower coverage limits compared to traditional life insurance policies.
- Premiums: Premiums are generally higher than traditional policies due to the increased risk assumed by the insurer.
- Ideal Candidates: This type of insurance is well-suited for those with pre-existing medical conditions, older applicants, or those who prefer not to undergo a medical exam for privacy reasons.
Joint Life Insurance
Joint Life Insurance is a policy that covers two individuals instead of one, providing a single death benefit. Depending on the type of policy selected, the benefit is paid out either after one person passes away (first-to-die) or after both individuals have passed away (last-to-die).
Key features of Joint Life Insurance:
- Cost Efficiency: This type of policy usually offers a lower premium compared to purchasing two separate policies, as it covers both partners under a single plan.
- Convenience and Simplicity: managing a single policy with one monthly premium payment is easier to track and budget.
- Limited coverage: it may provide less coverage compared to an individual policy, such as term life, universal or whole life insurance.
- Policy Termination: after the death benefit is paid out, the policy ends. The surviving spouse will need to apply for a new policy if additional insurance coverage is needed.
Types of Joint Life Insurance:
- First-to-Die: Pays out the death benefit upon the death of the first insured individual, after which the policy terminates, leaving the surviving partner without coverage. This type is often used to cover immediate financial needs, such as paying off a mortgage or other debts.
- Last-to-Die: Pays out the death benefit only after both insured individuals have passed away. This type is commonly used for estate planning, helping beneficiaries cover estate taxes or providing an inheritance.
Trust Our Brokers for Expert Guidance. Call us today to discuss your needs and find the best policy for you.