Custom Strategies & Services Created for the Life’s “What If’s”

Term Life insurance provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to beneficiary. Term insurance is typically the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

Whole Life vs. Universal Life -  Making a Permanent Choice Whole life and universal life insurance are both considered permanent policies. That means they’re designed to last your entire life and won’t expire after a certain period of time as long as required premiums are paid. They both have the potential to accumulate cash value over time that you may be able to borrow against tax-free, for any reason. Because of this feature, premiums may be higher than term insurance.

Whole Life insurance policies have a fixed premium, meaning you pay the same amount each and every year for your coverage. Much like universal life insurance, whole life has the potential to accumulate cash value over time, creating an amount that you may be able to borrow against. A whole life insurance policy can be described as providing life insurance protection with an accumulation feature, and might be a good choice if you want a policy with: Level premiums that stay the same for the life of the policy Cash value accumulation that you can use while you’re still alive Protection that you can’t outlive as long as your required premium payments are timely made.

Universal Life insurance policies offer flexible premiums that may allow you to adjust how much you’ll pay each year, by accessing some of the policy’s cash value (though you will need to pay the minimum premium amount or the policy will lapse). Depending on your policy’s potential cash value, it may be used to skip a premium payment, or be left alone with the potential to accumulate in value over time. Potential growth in a universal life policy will vary based on the specifics of your individual policy, as well as other factors. When you buy a policy, the issuing insurance company establishes a minimum interest crediting rate as outlined in your contract. However, if the insurer’s portfolio earns more than the minimum interest rate, the company may credit the excess interest to your policy. This is why universal life policies have the potential to earn more than a whole life policy some years, while in others they can earn less. A universal life insurance policy might be a good choice if you want: The flexibility to adjust your premiums and coverage amounts** Cash value that you may be able to borrow from while you’re still alive Permanent* life insurance protection and access to cash values.

Universal Life can provide you with a variety of different payment options, including a flexibility of changing your death benefits, as well as the potential to accumulate cash value over time. Here’s how: Since there is a cash value component, you may be able to skip premium payments as long as the cash value is enough to cover your required expenses for that month Some policies may allow you to increase or decrease the death benefit to match your particular circumstances** In many cases you may borrow against the cash value that may have accumulated in the policy The interest that you may have earned over time accumulates tax-deferred

Whole Life policies offer you a fixed level premium that won’t increase, the potential to accumulate cash value over time, and a fixed death benefit for the life of the policy. In addition: Any cash value growth is tax-deferred (as it is with universal life) Whole life may allow you to make withdrawals and loans against the policy Whole life offers the ease of budgeting for a regular and consistent premium payment every month.

Understanding Key Differences - The flexibility that a universal life policy provides is a key differentiator over whole life. As a result, universal life insurance premiums are typically lower during periods of high interest rates than whole life insurance premiums, often for the same amount of coverage. Another key difference would be how the interest is paid. While the interest paid on universal life insurance is often adjusted monthly, interest on a whole life insurance policy is normally adjusted annually. This could mean that during periods of rising interest rates, universal life insurance policy holders may see their cash values increase at a rapid rate compared to those in whole life insurance policies. Some people may prefer the set death benefit, level premiums, and the potential for growth of a whole life policy. However, for those who would prefer to have more flexibility and options when it comes to their permanent life insurance, then universal life might be the better choice.

Finding The Right Policy for You - Although whole and universal life policies have their own unique features and benefits, they both focus on providing your loved ones with the money they’ll need when you die. By working with a qualified life insurance agent or company representative, you’ll be able to select the policy that best meets your individual needs, budget, and financial goals.