There are several different types of life insurance products available to consumers today, this page will give you a brief introduction of those products, and when each may be the most appropriate choice.
Term insurance is a life insurance policy that pays off only if the insured dies during the term of the policy. At the end of the term, the policy terminates and no death benefit is paid. The easiest way to explain the product is to equate it to renting life insurance protection.
Most of the policies available today are designed to have you pay a level premium for a pre-determined period of years. Consumers can choose from a series of different terms usually offered, for example: 10, 15, 20, 25 or 30 years. If the insured dies during that policy term, the company will pay to the beneficiary the face amount of the policy.
Consumers need to choose:
Term Policies are often convertible to permanent life insurance without further evidence of insurability. Who should own Term Insurance?
Who will be the beneficiary of the life insurance?
Business applications for Term Insurance include:
What should a consumer look for in selecting a term life product?
A policy with:
What alternatives does a consumer have other than this type of product?
Other life insurance types:
These policies are preferred by most of our Estate Planning and Business clients who are seeking permanent and guaranteed life-long insurance protection at a cost, significantly lower than traditional whole life. The premiums are somewhat higher than limited coverage available from term insurance. Their primary concern is often a guaranteed premium like term coupled with death coverage that has no limit in duration. The policies can be designed to have premiums paid only for a specific period of time, for example, 1, 5, 12, 23 years or for life. The insurer guarantees that as long as that specified premium is paid when due, the death value will be guaranteed no matter how long the client lives. Many of our clients have opted for the limited pay structure to pay the premiums during their working years when their income is greatest, and therefore do not have premiums to pay in retirement.
What is the product?
Traditional Whole Life or permanent insurance provides lifetime insurance protection with guaranteed cash values, fixed premiums and death benefits as long as premiums are paid.
What are the choices consumers have within the product?
What are the features of whole life insurance?
When should whole life be used?
If you want insurance protection for a long period of time and can pay a fixed premium. If you desire a permanent life insurance policy with guarantees, cash values and fixed premiums.
What should a consumer look for in selecting a whole life product?