Most people are familiar with Life Insurance but are often unsure of the differences between the types that are available to consumers. Life Insurance is a vehicle that can play many roles. From a simple term policy offering a simple death benefit to a whole or universal life policy that can be used as a tax planning and retirement vehicle, life insurance can be quite versatile. Ultimately, ensuring the security for those family members closest to you is the main objective.

TERM LIFE INSURANCE
The most basic type of life insurance policy that exists on the market is Term. In exchange for paying a monthly premium for a specified length of time, typically 10-30 years, a benefit is paid out upon death of the insured.

WHOLE LIFE INSURANCE
One of the two types of permanent life insurance products on the market is Whole Life. As the name says, this product is designed to remain in effect for the insured’s entire life. Similar to Term in that it pays out a benefit upon death of the insured, however it is different in that it does accumulate cash value. A defined premium, interest rate and death benefit will accompany each policy and cash value will grow tax deferred.

UNIVERSAL LIFE INSURANCE
A type of flexible permanent life insurance that offers the low cost protection of Term Insurance but with the ability to build cash value is Universal Life Insurance (UL). With these policies, you have the flexibility to adjust how much you pay each year depending on how much cash value exists and the cost of insurance within your policy.

COLLATERAL ASSIGNMENT
As you become a business owner, lenders will typically require a life insurance policy that appoints the lender as the primary beneficiary as a death benefit to use as collateral for a loan. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed. Call or contact us today for details!