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Life Insurance

Term life insurance

It is also known as pure life insurance because its only purpose is to insure individuals against the loss of life. Premiums for term life insurance are based solely on a person’s age, health and the life insurer’s determination of life expectancy. If the person dies within the specified term, the insurer pays a death benefit to the designated beneficiary. If the term expires before death, no death benefit is paid.  Policyholders may be able to renew a term policy at its expiration, but their premiums will be based on their attained age.

Whole life insurance         

A cash value type of life insurance policy that provides protection during your entire lifetime and offers two key benefits:

a death benefit to be paid to the beneficiary in the event of your death
cash value accumulated over the term of the insurance that can be used as savings or to be borrowed against if you need the money while you are alive.

Whole life insurance is also known as "straight life" and "permanent life insurance." A whole life policy covers you for your entire life, not just for a specific period.  Whole life insurance policies apply the premiums paid into both the savings or investments and the life insurance death benefit.

Universal life insurance

Universal insurance is an alternative to a whole life policy, where the premium rates are set by the insurance company. The premiums of universal life insurance are paid into an account, thus generating cash value as the premiums are invested into investment funds. With universal life insurance, a person has the flexibility of lowering the death benefit any time they want. He or she can also add more benefits to the policy.

Index universal life insurance Provides most of the features found in other universal life policies with the added option of investing a part of the policy equity in the performance of one of the major stock indexes. The potential investment gain is capped, but the investment principal is guaranteed.  Like other universal life policies, a portion of the annual premium goes toward meeting the term insurance component, which provides the death benefit. After deducting other fees, the remainder of the premium accrues to the total policy cash value, which is available for investment.

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