Life Insurance Basics

Purpose of a Life Insurance

The primary purpose of life insurance is financial protection for survivors. It effectively creates an instant estate to meet survivor needs. Some policies also include other benefits such as savings, investment opportunities, long term care provisions, etc.

 

What is a Life Insurance Policy

It is a contract with an insurance company where, for the exchange of premium payments, the insurance company will provide a lump sum payment, known as a death benefit, to be paid to a beneficiary upon the insured’s death. The insured is called the policy owner and people who receive the funds are the beneficiaries.

 

Benefit of Life Insurance

  • Income replacement for years of lost salary
  • Paying off your home mortgage
  • Paying off other debts such as car loans, credit cards, etc.
  • Providing funds for kids education

 

Principle Types of Life Insurance Policies

Term Life – this policy varies by the term of the policy and the medical condition of the policy owner. Typical terms are 10 year, 20 year, and 30 year. When the term ends the policy ends and the benefit ends.

Permanent Life: there are three types of permanent life: 1. Whole life, 2. Universal Life, and 3.Variable Life. Permanent Life is as the name implies, life insurance for as long as you live. It is possible, as the cash value of the policy grows, that the premiums may be paid out of the dividends from the accumulated cash value.

 

When to review your Life Insurance policy

It is always good to review your life insurance needs periodically as you age because your needs and ability to pay may change with age. For instance, if you buy a 30 year term life policy at 20 years old it will expire at 50 years old. You may, however, need continuing life insurance at 50 years old and the price may increase substantially depending on your medical condition.

Life Insurance

Plans For Term Life Insurance

Term Life insurance is the most affordable way to protect your family with larger death benefit amounts over a specified period of time. It can help with things such as paying the mortgage, college tuition, credit card debt, final expenses, and other items that may be a financial burden to your family when you depart. Term Life insurance gives you the option to choose the length of time you need the protection. Typically, the length of term options range from 10,15,20,25, and 30 years.

Plans For Permanent Life Insurance

Most life insurance policies will have an expiration date. With Permanent Life Insurance, the policy you keep is yours for life and no expiration date. You are set for the rest of your life with no need to enroll again. Many benefits come along with it such as no surprise costs, pre-planned inheritances that is paid to all beneficiaries of your choice, tax free and can maximize your pension.

Plans for Final Expense

Leave your family a legacy of love instead of medical bills and funeral expenses. A Whole Life policy is meant to protect you for the duration of your life and provide you with peace of mind that your final expenses will be taken care of.

 

Permanent Life

Plans For Permanent Life Insurance

The policy you keep is yours for life and no expiration date

Most life insurance policies will have an expiration date. With Permanent Life Insurance, the policy you keep is yours for life and no expiration date. You are set for the rest of your life with no need to enroll again. Many benefits come along with it such as no surprise costs, pre-planned inheritances that is paid to all beneficiaries of your choice, tax free and can maximize your pension.

Fast Facts

  • The plan is a combination of Whole Life and Universal Life Insurance.
  • The coverage lasts the rest of your life. No expiration date is in the coverage.
  • Premiums stay the same from when you first buy, however depending at what age you begin the premium price will vary.
  • Accrues cash value over time after the premium payment

How Much Could Permanent Life Insurance Cost?
Normally, Permanent Life Insurance costs up to 10 times more the Term Life Insurance.

To help you pick the right type of insurance, call a SeniorQuote Licensed Agent who can find you what you need. Your new Permanent Life Insurance policy can be issued within days of application with no health exam by just answering a few short yes or no questions to help us get you approved with the right carrier.

You deserve to have the peace of mind that comes from. Knowing your loved ones are taken care of. Don’t put it off, call a SeniorQuote Licensed Agent today.

What is permanent life insurance?

Permanent life insurance includes a number of life insurance products that can provide you and your loved ones with lifelong protection. Two of the most common types of permanent life insurance are whole life insurance and universal life insurance. Whole life offers coverage for your entire lifetime and its savings can often grow at a guaranteed rate. Universal life also offers a savings element in addition to a death benefit, but provides different types of premium structures and earns based on market performance.
Understanding the ins and outs of permanent life insurance can seem overwhelming, but we can help you sort it out. We can instantly find and compare personalized quotes from some of the most trusted insurance companies, making sure the policy you choose is right for you.

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The Basics of Permanent Life Insurance

As the name suggests, permanent life insurance is designed to last for your entire life. In other words, when you buy it, you’re covered as long as the premiums are paid. Permanent life insurance premiums go toward both maintaining the policy’s death benefit and allowing the policy to build cash value. Learn more about the cash value of permanent life insurance below.

The policy you keep is yours for life and no expiration date

Permanent life insurance policies are sometimes referred to as cash value life insurance policies, as above mentions, the policy builds a cash value alongside maintaining the death benefit. You can typically borrow funds from the total cash value of your policy to help support other financial needs such as a child’s college education or covering medical expenses. Because of this savings capability, premiums for permanent life insurance are often higher than that of a term life insurance policy. That being said, your premium on your permanent policy will remain the same as long as the policy is in force.

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Types of Permanent Life Insurance
Learn more about the types of permanent life insurance.
Whole Life Insurance
Like all types of life insurance, whole life has its distinguishing features, including:

  • Lifetime Coverage – Whole life insurance provides coverage for a lifetime.
  • Set Premium – The premium you pay for the first month is what you’ll pay for every month the policy is in force.
  • Cash Value – As your premiums accrue, and at a time specified by the insurance company, you can borrow against your whole life policy’s cash value.

Universal Life Insurance

  • Lifetime Coverage – Much like whole life insurance, universal life insurance provides coverage for a lifetime.
  • Flexible – Universal life insurance policies are typically more flexible than other types of life insurance. Although premiums tend to be high, you get to determine what premium you pay between the minimum and maximum set amount and can adjust your death benefit based on cash value.

Permanent Life Insurance Coverage

There are varying benefits and disadvantages to think about when considering permanent life insurance. Permanent life insurance policies with a cash value typically only make sense if you need lifelong coverage and have strong finances in place. If you’re hoping to help cover payments over a set period, such as a mortgage, a child’s education or the general replacement of income, term life insurance might be a better fit considering premium costs will likely be lower considering the shorter timeframe of the policy. We can help you weigh out your options and figure out what kind of life insurance policy would be the best fit for you and your family.