What type of Life Insurance is appropriate

When it comes to Life Insurance, there are quite a few factors that come into play before deciding what is right for a family.

One of the most basic questions is   “What type of life insurance should I get?”

That seems like it may be an easy question to answer, but in reality, there are quite a few options available.

The three most common types of insurance are Term Life, Whole Life and Guaranteed Universal Life.  Below we will provide some insight into each of them.

Term Life:
This is the most common type of insurance, mostly because it is (by far) the most affordable type of coverage.  Level Term is exactly what is sounds like.   It provides coverage for a specified term period, defined by years, and pays the beneficiary
a specific amount in the event death occurs during the term period, while the policy is in force.  There are not usually very many bells and whistles associated with Term Insurance.   The premium is paid and the insurance company pays the beneficiary
if death occurs while the policy is in force.  The premiums for Term insurance are going to depend on health and other personal history factors but, once approved, the premiums will remain level for the entire term of the policy.

Whole Life:
Whole Life is another type of Life Insurance.  Unlike Term, Whole Life covers an insured for their WHOLE LIFE.    After hearing that, many people will say “That’s great!  Sign me up”, but the main difference with Whole Life, is the premiums are
Approximately 10x the premiums of Term Insurance.  With that said, there are some significant advantages to taking a Whole Life policy out as well.  First, coverage cannot be outlived like it can with Term.  There is no “Term” period to end coverage.  As long premiums are paid
there will be coverage.  The next difference is it builds quite a bit of Cash Value, which can be borrowed against to help pay unexpected bills or to use for various things that come up in life.   The next benefit is that
most Whole Life policies pay what are called Dividends.  Dividends are a “Profit Share” from the insurance company to their policy holders.  When the company pays a Dividend (usually 1x a year), they are automatically reinvested into the policy, which increases the cash value
amount as well as the Death Benefit.  So, while this type of policy is more expensive, there are factors to consider when considering a Whole Life policy.

Guaranteed Universal Life (GUL):GUL is what we like to call a blend between Term Insurance and Whole Life Insurance.  GUL policies run and provide coverage for an entire life like a Whole Life policy, but they do not generally build Cash Value in the policy, similar to the way Term does not either.
The benefit is the premium is higher than term, but lower than a Whole Life premium.   There is also the peace of mind knowing the policy will not expire at the end of a term, most likely when coverage is needed the most.

In addition to the above policy types, many of them (including Term), have built in Living Benefit Riders, which allow the insured to take advantage of the policy benefits while still living.  We would be happy to discuss these in detail.

Call our office anytime and we look forward to helping you!