Life Insurance
Life insurance comes in two basic forms; temporary and permanent.
Term Insurance
Temporary insurance is more commonly known as term insurance. Term life insurance is taken out for a specific period of time, usually 10, 20 or 30 years. The insurance company will pay the value of the policy only upon the death of the insured.
There is no investment component with a term policy and it cannot be borrowed against. If the insured lives beyond the expiration date of the policy, no money is paid out and the coverage ends.
Many term policies are “level” “guaranteed”, meaning that the premium will stay the same for the length of the term and that the insured is guaranteed an opportunity to renew the policy without regard to insurability, at a rate appropriate to the age of the insured at that time.
Most term policies are also convertible. The insured has an opportunity to change to a permanent insurance policy (“term to perm”). Proof of insurability if often required for conversion.
Whole Life Insurance
Whole life is a form of permanent insurance. The policy remains in effect until the insured dies or the policy matures, at which time it pays out. Whole life premiums are level and its death benefits are guaranteed.
Unlike with term insurance, whole life builds cash value that the insured can withdraw or borrow against. The policy can also be “surrendered” for it stated surrender value.
In addition to whole life there are other forms of permanent insurance including universal life, limited pay and endowment.
Life insurance can provide financial help in a variety of ways if the family bread winner passes. Contact us directly for consultation with our insurance specialists.