Life insurance can be an important part of your personal safety net, especially if you have financial dependents.

 

Whole Life Insurance
Whole life insurance provides protection as well as a cash value. Your premiums remain at a fixed level for the duration of the contract. Over time, the policy builds up cash value on a tax-deferred basis. It may also provide for dividends (which are not guaranteed), that can be used to add more coverage, can build a cash-value that you can use to supplement your retirement income or help provide for a child's education—it's your money to use as you need.1 But keep in mind life insurance should not be purchased solely for cash-value accumulation; its primary purpose is protection.

What is it?
Whole Life is the most basic type of permanent life insurance. Depending on your age and health, your premium will purchase a specific death benefit and produce a specific cash value, which are guaranteed for the life of the policy as long as your premiums are paid. Whole Life premiums, while higher than term premiums, are guaranteed not to increase.

Who's it for?
People who:

• have a lifetime need for insurance protection
• prefer the high degree of safety provided by the policy's guarantees
• are attracted by the policy's ability to build tax-deferred cash values
• like to know that their premiums will never increase

Benefits:
Over time, whole life insurance may be more economical than term insurance since premiums do not increase with age and the policy builds a cash value.

• Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment.
• Policy loans and withdrawals provide access to your cash value.
• If you cancel the policy, the accumulated cash value is yours to use as you wish. Taxes may apply.
• Dividends can be taken in cash or used to increase the policy's cash value and death benefit. This means that certain "dividend options" may be used to purchase additional insurance coverage each year, regardless of your health.
• Premiums are guaranteed not to increase over the life of the policy.
• A minimum death benefit is guaranteed.
• The cash value is guaranteed to grow at a specified, minimum rate.

Term Life
Term life insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection for a specified period of time, such as 10, 20 or 30 years.1 If you die within the term period and the policy is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your term life insurance policy is renewed. There is no "accumulation" element, or cash value with term life insurance.

Who's it for?

• People with a temporary need for life insurance protection.
• Those who need a large amount of insurance protection but have limited budgets.
• People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).

Benefits of Term Life Insurance:

• It provides insurance protection for a low cost (at least initially).
• If your needs change, most term life insurance policies allow you to convert to a permanent life insurance policy without having to take a medical exam or provide other information about your health.
• Term life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses).
• Death benefits are generally received free from income tax.
  

Universal Life Insurance
Universal life insurance is a flexible life insurance plan. These policies are interest-sensitive and permit you to adjust the death benefit and/or premium payments, within limits, to fit your situation. Your net premium payments are applied to the accumulation fund, which earns interest. The monthly cost of the death benefit and policy administration is deducted from the accumulation fund. As with Whole Life Insurance, the cash value is yours — you may withdraw it or borrow against it at any time.1 Or, you can use your cash value to pay premiums. Universal life rates are subject to change, but the rate will never fall below the minimum rate guaranteed in the contract.

 

Variable Universal Life Insurance
Variable universal life insurance may be for you if you want to invest the cash value of your life insurance policy in various funding options that in turn invest in such things as stocks and bonds. You decide how your net policy values are to be invested—and you bear the investment risk. If market performance is poor, your death benefit may decrease, and you may have to pay higher premiums to keep the policy in effect. But your cash value also has the potential to grow more rapidly than with other cash-value policies if the market performs well. Like Universal Life Insurance, above, premiums and death benefits are adjustable within limits.

Not sure which policy is right for you? We can help! Call: (310) 425-8000