Life Insurance Definitions
Level Term (MOST POPULAR)
- Premiums and life insurance remains level for a specified increment.
- It will renew at higher rate after the level period.
- Usually renewable to age 90.
- It is guaranteed convertible to a permanent plan at the risk category of the term any time during the level period.
- 5 year level term
- 10 year level term
- 15 year level term
- 20 year level term
- 25 year level term
- 30 year level term
* Many of the level term products offer a “Return Of Premium” benefit. This allows you to get 100% of your money refunded at the end of the initial level term period, with a prorated refund offered in earlier years if you no longer need your policy.
Annual Renewable Term (art) – Premium increases every year.
- Whole Life – Categorized as Permanent Insurance
- Offers an accumulation of cash value that typically receives dividends
- Premiums usually guaranteed level to age 90
Universal Life (UL) – Categorized as Permanent Insurance
- UL is a buy term and invest the difference policy rolled up in one contract
- Many UL policies allow you to invest the difference in a variety of securities based portfolios.
- Most UL policies are only guaranteed level premiums if they are over funded properly.
Second To Die
- Insures both husband and wife with one benefit whereas the benefit pays after the second person dies.
- Usually used in estate planning to help pay inheritance taxes after both parents die. (example- This eliminates the need to sell off inherited property to pay taxes.
Buy Sell Life Insurance
- Two or more business partners buy life insurance with each other as beneficiaries so that if one dies, the other can buy out the spouse/family.
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