LIFE INSURANCE
There are different types of Life Insurance that will provide assurance protection should you & your family need it. We work with you and will help you identify the product that will best meet your family's needs.
TYPES OF INSURANCE
TERM life insurance
Term Life Insurance or term assurance is Life Insurance policy that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is typically the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
Term Life Insurance can be contrasted to Permanent Life Insurance such as: Whole Life, Universal Life, and Variable Universal Life, which guarantee coverage at fixed premiums for the lifetime of the covered individual unless the policy is allowed to lapse.
Term Insurance is not generally used for Estate Planning needs or Charitable Giving strategies but is used for pure replacement needs for an individual's income. Term Insurance functions in a manner similar to most other types of insurance in that it satisfies claims against what is insured if the premiums are up to date, the contract has not expired, and does not provide for a return of premium dollars if no claims are filed.
Because Term Life Insurance is a pure death benefit, its primary use is to provide coverage of financial responsibilities for the Insured of his or her Beneficiaries. Such responsibilities may include, but are not limited to: consumer debt, dependent care, university education for dependents, funeral costs, mortgages, and other expenses. Term Life Insurance may be chosen in favor of Permanent Life Insurance because Term Insurance is usually much less expensive (depending on the length of the term), by example let's say: even if the applicant is an everyday smoker. An individual might choose to obtain a policy whose term expires near his or her retirement age based on the premise that, by the time the individual retires, he or she would have amassed sufficient funds in retirement savings to provide financial security for any claims.
Term Life Insurance can be contrasted to Permanent Life Insurance such as: Whole Life, Universal Life, and Variable Universal Life, which guarantee coverage at fixed premiums for the lifetime of the covered individual unless the policy is allowed to lapse.
Term Insurance is not generally used for Estate Planning needs or Charitable Giving strategies but is used for pure replacement needs for an individual's income. Term Insurance functions in a manner similar to most other types of insurance in that it satisfies claims against what is insured if the premiums are up to date, the contract has not expired, and does not provide for a return of premium dollars if no claims are filed.
Because Term Life Insurance is a pure death benefit, its primary use is to provide coverage of financial responsibilities for the Insured of his or her Beneficiaries. Such responsibilities may include, but are not limited to: consumer debt, dependent care, university education for dependents, funeral costs, mortgages, and other expenses. Term Life Insurance may be chosen in favor of Permanent Life Insurance because Term Insurance is usually much less expensive (depending on the length of the term), by example let's say: even if the applicant is an everyday smoker. An individual might choose to obtain a policy whose term expires near his or her retirement age based on the premise that, by the time the individual retires, he or she would have amassed sufficient funds in retirement savings to provide financial security for any claims.
UNIVERSAL life insurance
Universal Life Insurance (often shortened to UL) is a type of cash value Life Insurance policy, sold primarily in the United States. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the Cash Value of the policy, which is credited each month with interest. The policy is debited each month by a cost of insurance (COI) charge as well as any other policy charges and fees drawn from the Cash Value, even if no premium payment is made that month. Interest credited to the account is determined by the Insurer but has a contractual minimum rate (often 2%). When an Earnings Rate is pegged to a financial index such as: a stock, bond or other interest rate index, the policy is an "Indexed Universal Life" contract (often shortened to IUL). Such policies offer the advantage of guaranteed level premiums throughout the Insured's lifetime at a substantially lower premium cost than an equivalent Whole Life Insurance Policy at first. The cost of Insurance always increases, as is found on the cost index table (usually p. 3 of a Contract). That not only allows for easy comparison of costs between Carriers, but also works well in Irrevocable Life Insurance Trusts (ILITs) since cash is of no consequence.
WHOLE life insurance
Whole life insurance, or whole of life assurance, sometimes called "straight life" or "ordinary life," is a Life Insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date. As a Life Insurance policy it represents a contract between the Insured (you) and Insurer (Company) that as long as the contract terms are met, the Insurer will pay the death benefit of the policy to the policy's beneficiaries, when the insured dies. Because Whole Life policies are guaranteed to remain in force as long as the required premiums are paid, the premiums are typically much higher than those of Term Life Insurance where the premium is fixed only for a limited term. Whole Life premiums are fixed, based on your age at time issued, and usually do not increase with age. The Insured party normally pays premiums until death, except for limited pay policies which may be paid up in 10 years, 20 years, or at age 65. Whole Life insurance belongs to the cash value category of life insurance, which also includes Universal Life, Variable Life, and Endowment policies.
Call Western States Investments for discussions regarding your Life Insurance needs.
Call us today @ (951) 371-7608
Call us today @ (951) 371-7608
