Types Of Insurance Coverage I Offer
Term Life Insurance
Term life insurance lasts for a specified number of years and then ends. You choose the term when you take out the policy, with common terms being 10, 20, or 30 years. The best-term life insurance policies balance affordability with long-term financial strength.
Types of Term Life Insurance:- Decreasing Term Life Insurance: This is renewable term life insurance where the coverage decreases over the life of the policy at a predetermined rate.
- Convertible Term Life Insurance: This allows policyholders to convert a term policy to permanent insurance.
- Renewable Term Life Insurance: This is a yearly renewable term life policy that provides a quote for the year the policy is purchased. Premiums increase annually and it is usually the least expensive term insurance initially.
Term life insurance is attractive to young people with children because parents can obtain large amounts of coverage at reasonably low costs. Upon the death of a parent, a significant benefit can replace lost income.
These policies are also well-suited for people who temporarily need specific amounts of life insurance. For example, the policyholder may calculate that by the time the policy expires, their survivors will no longer need extra financial protection or will have accumulated enough liquid assets to self-insure.
Term life insurance is for a predetermined period, typically between 10 and 30 years. Term policies may be renewed after they end, with premiums recalculated based on the holder’s age, life expectancy, and health. By contrast, whole life insurance covers the entire life of the holder. Unlike a term life policy, whole life insurance includes a savings component, where the cash value of the contract accumulates for the holder. The holder can withdraw or borrow against the savings portion of their policy, where it can serve as a source of equity.
Whole Life Insurance
Whole life insurance, also known as traditional life insurance, provides permanent death benefit coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value may accumulate. Interest accrues at a fixed rate and on a tax-deferred basis.
Whole life insurance policies are one type of permanent life insurance. Universal life, indexed universal life, and variable universal life are others. Whole life insurance is the original life insurance policy, but it does not equal permanent life insurance as there are many types of permanent life insurance.
Universal life insurance and whole life insurance are both permanent life insurance types that offer guaranteed death benefits for the life of the insured. However, a universal life policy allows the policyholder to adjust the death benefit as well as the premiums. As one might expect, higher death benefits require higher premiums. Universal life policyholders can also use their accumulated cash value to pay premiums, provided the balance is sufficient to cover the minimum due. Whole life insurance, alternatively, does not allow for changes to the death benefit or premiums, which are set upon issue.
Universal Life Insurance
Universal life (UL) insurance is permanent life insurance (lasting the lifetime of the insured) that has an investment savings element and low premiums similar to those of term life insurance. Most UL insurance policies contain a flexible-premium option. However, some require a single premium (single lump-sum payment) or fixed premiums (scheduled fixed payments).
Unlike term life, UL insurance policies can accumulate interest-bearing funds like a savings account. Additionally, policyholders can adjust their premiums and death benefits. Those paying extra toward their premium receive interest on that excess.
If you want to build tax-deferred savings and don’t expect to tap into the funds for a long time, universal life may be a suitable option. The cash value option that’s part of a universal life policy may be available for you to withdraw or borrow against in an emergency.
It’s a good idea to talk with your insurance provider to better understand your life insurance options. They can help you review your personal situation and long-term goals to choose a policy that’s a good fit for you and your family.
What is Final Expense Insurance?
Final expense insurance, also known as burial insurance or funeral insurance, is a type of life insurance designed to cover end-of-life expenses. This includes funeral costs, medical bills, and other remaining debts after a person passes away.Why is Final Expense Insurance Important?
Final expense insurance helps relieve the financial burden on your loved ones during a difficult time. It ensures that your funeral and other final costs are covered, so your family doesn’t have to pay out of pocket or take on debt.Who Should Consider Final Expense Insurance?
This type of insurance is ideal for individuals who:- Do not have traditional life insurance
- Want to ensure their end-of-life costs are covered
- Are older and may not qualify for larger life insurance policies
- Wish to leave a small inheritance or financial help for loved ones
What Does Final Expense Insurance Cover?
Final expense policies typically cover:- Funeral service and burial or cremation costs
- Medical bills not covered by health insurance
- Outstanding debts or credit card balances
- Legal or probate fees
- Any other end-of-life expenses
How Does Final Expense Insurance Work?
These policies usually have smaller benefit amounts, ranging from $2,000 to $50,000. Premiums are generally affordable and can be paid monthly. Upon your passing, the policy pays a tax-free cash benefit to your designated beneficiary to cover your final expenses.Types of Final Expense Insurance
- Simplified Issue: Requires a brief medical questionnaire, but no medical exam.
- Guaranteed Issue: No medical questions or exams; approval is guaranteed, but premiums may be higher.
Benefits of Final Expense Insurance
- Affordable monthly premiums
- Easy application process
- No medical exam required (in most cases)
- Fast payout to beneficiaries
- Peace of mind for you and your loved ones
