Secured Benefits Group

Types of Life Insurance

 

What is Term Life Insurance?

 

As its name indicates, term life insurance insures you for a specific term or span of years. If you die during the term, your beneficiary is paid the coverage amount subject to your policy terms. Because it provides "pure" insurance without any cash value accumulation, term life insurance coverage is generally less expensive initially than permanent coverage. Term life insurance provides a great answer to the question: How will your family manage financially if you die prematurely?

 

The Advantages of Term Life Insurance

Term life insurance helps to provide peace of mind for you and your family. It also helps you protect the assets you've worked so hard to attain. And all this security reaches up to 30 years into the future, at guaranteed level premiums that are competitively priced today. The Trendsetter® Super Series policies offer valuable protection for your family or business partnership with attractive premiums.

 

What is Whole Life Insurance?

Life insurance under which coverage is intended to remain in force during the Insured's entire lifetime, providing premiums are paid as specified in the policy. A whole life insurance policy can build cash value on a tax-deferred basis. Both the premiums to pay and the cash values that result are predetermined and found in the policy contract. The cash value is an amount of money available to the policy owner for policy loans or as the surrender value if the policy is canceled and returned to the company.

 

Cash Value

With pure whole life insurance, the cash value is guaranteed. As an added benefit, cash value can be used by the policy owner as a "cash reserve" for emergencies, extra income, or college expenses. This is considered a loan (interest charges accrue). What's more, you're not obligated to repay the loan, but any amount not repaid will be deducted from the policy's death benefit.

 

What is Universal Life Insurance?

Universal Life (UL) is a form of permanent life insurance. If your UL policy is in force at the time of the insured’s death (second death for joint life policies), policy proceeds will be paid in accordance with the terms of the policy to the beneficiary you designate. UL policies offer a valuable death benefit and provide the opportunity to build cash values that you can borrow or withdraw. With certain limits, you can choose the premium you wish to pay and this determines how the policy values develop. Each policy month, a monthly deduction to cover the cost of the insurance protection is deducted from the policy value.

 

The Advantages of Universal Life Insurance

The advantage over other forms of permanent insurance is that universal life insurance gives you more flexibility over your policy to assist you in meeting your financial goals. Within certain limits, you can choose the amount, method and timing of your premium payments. UL is also an “interest sensitive” product. This means that the interest rates credited to policy values will change over time. Flexibility of payments, tax-deferred cash value accumulation, and coverage options (subject to contract requirements) are the primary advantages over term insurance. Because of these advantages, universal life can be used in estate planning and retirement planning, offering the policy owner a variety of options.

 

The Power of Tax-Deferred Earning, Access to Your Cash Value, and Variable Life Insurance Protection

Because it's a life insurance policy, variable universal life insurance provides your beneficiaries with a death benefit that can help them preserve their financial security in a time of need while offering you the opportunity to invest for your future. Variable universal life insurance offers you the protection of life insurance with the investment advantages of professionally managed money. Consider a variable universal life insurance product if you want the benefits of life insurance with tax-deferred growth and federal income tax-free transfer of the death benefit to your beneficiaries.

 

Survivorship Insurance

Although Congress passed legislation to increase the "applicable exclusion amount" for estate taxes, the fact is that the "death tax" will only be completely eliminated for a one-year window - the year 2010 - unless the repeal is extended or made permanent through new legislation. The message is clear - planning ahead to cover the cost of potential estate taxes is still the best strategy. Sometimes referred to as second-to-die insurance provides a death benefit that can be used to help pay estate taxes.