Life Insurance

These days, it seems like there are endless different types of life insurance.  However, life insurance can be divided into three main categories.  Term life insurance, whole life insurance, and universal life insurance.

Term Life Insurance

is pure life insurance for a fixed period of time. It could be as little as 10 years or as long as 30.  The policy has no value unless the insured dies while the policy is in force. In addition, the rates go up at the end of the chosen term period. If the insured wishes to extend the term period, requalification is always required

Whole Life Insurance

is a type of permanent coverage.  This is because it guarantees coverage up to a certain age (usually 100). These policies endow at age 100, which means the cash value is equal to the death benefit.  This guarantees the payout even if the insured lives to be 100.  The cash value is paid to the owner of the policy if the policy is surrendered early (before age 100). The premiums for whole life are significantly higher than for term insurance.

Universal Life Insurance

is also a permanent plan that has a flexible premium. It is considered permanent because it never requires re-qualification, and coverage can be maintained for as long as the insured chooses.  The length of coverage will be determined by the amount of premium paid.  There typically is a minimum premium required,  but changes can be made at any time. Increases in premium will result in an extension of coverage.  Universal life may also have a cash accumulation value which means that some or all of the premium would be returned to the policy owner if the policy were cancelled early.

Long term Care Insurance

LTC insurance covers  the care and services provided to a person who  is determined by a licensed physician to need regular daily help with their Activities of Daily Living (ADL’s). The normal ADL’s are eating, bathing, dressing, using the restroom, transferring, ( moving from a bed to a chair) ambulating, or a severe cognitive impairment like Alzheimer’s.  LTC insurance will pay for a health professional to come in and provide care in the home, or pay for care in a facility. .

Hybrid products

A Hybrid product combines the protection of life insurance with the ability to access the death benefit during your lifetime to pay for  long term care expenses.  Many Hybrids are designed to allow clients to reposition assets to cover the premium.  Because they provide a tax free benefit, Hybrids can be both a tax efficient and cost effective way to pay for long term care expenses. Policy features also may include a return of premium if the policy is canceled before providing a benefit.

Annuities

Annuities are an investment sponsored by insurance companies, and are designed to  create a revenue source for your retirement. You make a deposit now, and you receive an income stream in the future. The income can be guaranteed for selected period of time, including lifetime.

Disability

Disability insurance provides income if you are unable to work due to a disabling accident or illness. It allows you to continue receiving income,  even if you are not able to work. Disability income insurance is a very important way to protect you, your family, and your assets.