Overview
A life insurance policy contributes a payment to the beneficiary upon the death of an insured individual. Also known as the death benefit. The owner of the policy makes his/her payments known as premiums to the insurance companies. The insurance company pays the death benefit to the beneficiary of the policy is the insured individual dies within the term.
Discussed on this page:
- Term Insurance
- Whole Life Insurance
- Universal Life
- Term to 100
- Insurance with Guaranteed Cash Value
- Guaranteed Acceptance Insurance
Term Insurance
Term Insurance is considered to be a temporary insurance compared to permanent types like whole life or universal life. This means that it has an expiry date and the premiums can rise in price. Term insurance starts much cheaper than other types but increases in expense as you age. The increases are guaranteed, which means you know much they will cost each term.
Term insurance usually comes in 5, 10, 15, 20-year terms, although longer periods are now available to provide coverage for long-term needs.
Benefits:
- Cheaper Premiums
- Can be converted to permanent insurance
- Premium stays same for the term
- Better serves for temporary needs
- It can be renewed if option is available
Limitations:
- Premiums do increase when they get older and eventually becomes unaffordable
- Cannot be renewed beyond 80
- No cash value
- Fail to pay premiums, will be canceled after grace period
- No returns on premiums
Whole Life Insurance
Whole life insurance is a permanent form of insurance that provides coverage for a lifetime. Whole Life also protects your family and builds cash value from your premiums that you pay. Usually, Whole life insurance provides a lifelong coverage with no future medical examinations.
Premiums for whole life insurance will be relatively higher than term life, but it will remain the same throughout the policy. Whole life insurance is an excellent choice if you can adequately afford the premiums, and if you want to ensure that you have life insurance coverage for your entire lifetime. Additionally, whole life insurance may be used as part of your estate planning.
Benefits:
- Premiums stay the same throughout the entire policy
- Single sum can be paid or premium can be paid over the contract time
- Better flexibility than Term-100
Limitations:
- Long Term Commitments
- Premiums are higher than Term-100
Universal Life
Universal is another type of permanent insurance like whole life Insurance, but it allows for flexibility in premium payments. In Universal life, the premiums you pay would go into a holding account, and the insurance company would invest that money in other investments or funds. The money is tax-free, and you can take a loan against this amount.
The advantage of Universal life is that you have a surplus of savings, you have the choice of not paying the premiums. However, if you stop reduce your premiums and the saving accumulation get used up, the policy might lapse, and your life insurance coverage could end. If you are looking for insurance coverage including some investment, then Universal life is the best option for you.
Benefits:
- You can increase or decrease the face value of insurance
- You can add additional lives insured
- You can substitute one life insured for another
- Most of the products are backed by popular funds
- More flexible than any other insurance
Limitations:
- In comparisons with other insurance, it is more expensive
- You have to keep track of how your cash value is holding in the account
- Interest Rates are conservative
- Repayment of borrowed cash value
Term to 100
Term to 100 is very straightforward, premiums in this policy remain constant, does not go up or down. No other benefits with Term to 100 which means there is no cash value. Unlike Whole life, term to 100 does not any cash surrender values should you cancel your policy.
Benefits:
- The product does not need renewal
- The premiums are leveled for the entire term
- Face value is paid back if he/she lives to the age of 100
- Convert the policy to paid of policy
Limitations:
- No cash value
- It is a long term commitment
- No flexibility in Term to 100 insurance
Insurance with Guaranteed Cash Value
We offer guaranteed cash values AND money-back insurance policies. The concept is quite interesting as you pay monthly or annual premiums for a period that you determine and you remain covered for the rest of your life. Moreover, this concept has a built-in savings plan that allows you to accumulate cash value tax-free that can be used for any purchase (e.g. Guaranteed cash value of $125,000 at age 65). Whether it be a recreational item like a boat, or plane ticket to visit family and friends overseas, this plan gives you financial freedom and flexibility augmenting your retirement savings.
Guaranteed Acceptance Insurance
As the name suggests, acceptance for this life insurance is guaranteed. This product is recommended for people over age 60. The premium and coverage options are fewer but if you have a pre-existing condition that would otherwise prevent you from owning traditional life insurance, than the best feature of this plan is that you are covered.