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Types of Life Insurance |
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Term |
Whole Life |
Universal Life |
Variable Life |
Variable Universal Life |
| Premium |
Premiums increase at each renewal |
Level |
Flexible |
Level |
Flexible |
| Coverage |
Usually renewable until at least age 70; sometimes to age 95 |
For life |
For life |
For life |
For life |
| Death benefit |
Guaranteed |
Guaranteed |
May be guaranteed, based on policy |
Guaranteed |
May be guaranteed, based on policy |
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May increase with dividends*
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Can be increased or decreased
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Varies relative to cash value investment returns
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Can be increased or decreased; varies relative to cash value investment returns
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| Cash value |
None |
Guaranteed |
Guaranteed minimum interest rate |
Not guaranteed |
Not guaranteed |
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May increase with dividends*
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Varies based on interest rates
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Fluctuates with subaccount performance
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Fluctuates with subaccount performance
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| Policy loans allowed? |
Not applicable |
Yes |
Yes |
Yes
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Yes |
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May be able to borrow up to 100% of total cash surrender value less annual loan interest rate
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Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy) |
Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy) |
Same as whole life, but usually available at lower net interest rate (i.e., pay the interest rate and get a credit back to the policy) |
| Cash withdrawals allowed? |
Not applicable |
No |
Yes |
No |
Yes |
| Cash value account growth |
No cash value account |
Insurer determines guaranteed cash value and declares dividends based on performance of its general investment portfolio* |
Insurer determines cash value interest crediting rates based on current interest rate returns to the company |
Cash value account growth depends upon the investment performance of the subaccounts you choose |
Cash value account growth depends upon the investment performance of the subaccounts you choose |
*Dividends are not guaranteed.
Note: Any guarantees associated with payment of death benefits, income options, or rates of return are subject to the claims-paying ability of the insurer.
Note: Policy loans and withdrawals will reduce the policy's cash value and death benefit and may cause the policy to lapse. Withdrawals may be subject to surrender charges and income tax, and a 10% penalty may apply to withdrawals from a modified endowment contract if made under age 59½.
Note: Variable life and variable universal life insurance policies are offered by prospectus, which you can obtain from your financial professional or the insurance company. The prospectus contains detailed information about investment objectives, risks, charges, and expenses. You should read the prospectus and consider this information carefully before purchasing a variable life or a variable universal life insurance policy.
Copyright 2006-2011 Forefield Inc. All rights reserved. |
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Determining Need |
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Determining the Need for Life Insurance: How Much is enough?
What determines your life insurance need?
Life stages and circumstances
When determining your life insurance need, you should first consider your life stage and circumstances. Marital status, number of dependents, size and nature of financial obligations, your career stage, and your intentions to pass on your property are all factors to consider. Your need for life insurance changes as the circumstances of your life change.
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Read more...
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Life Insurance Review |
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Like a regular health examination, a policy review may confirm that you are in good shape, and no change or additional coverage is needed.
However, you might find that an adjustment to your current life insurance plan might help you better meet your protection needs and help maintain your financial health!
That is why a careful annual review of your life insurance is necessary, especially when a major life event happens.
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Read more...
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Term vs. Permanent Life Insurance |
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What are the types of insurance policies?
There are two major categories of life insurance: term life and permanent (cash value) life insurance. Within the two broad categories are many types of policies that have been developed over the years in response to consumer demand, market conditions, and changes in the tax laws.
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Read more...
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Term LIfe Insurance |
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What is it?
Temporary, pure insurance
Term life insurance provides life insurance coverage for a specific time period (term). It is often referred to as temporary insurance or pure insurance, in that there is no cash value in the policy. The face amount of the policy is paid if you die during the term of the policy. When you live longer than the term of the insurance coverage, nothing is paid.
Caution: Any guarantees associated with payment of death benefits, income options, or rates of return are based on the claims-paying ability of the insurer. Policy loans and withdrawals will reduce the policy's cash value and death benefit.
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