Broker Check

There are no guarantees in Life except...

| June 06, 2018
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You’ve heard that phrase “The only guarantees in life are death and taxes”.  Well, that may be true but there are other types of guarantees related to life insurance. All of the following assumes that the agreed upon premium is paid and paid in a timely manner. It also assumes that no loans have been made from the policy.

 

Term Life Insurance – this is often the least expensive way to purchase life insurance. Term life has the following guarantees:

  • Guarantee of a fixed amount of time that the coverage is in place. Coverage can typically be purchased for 10 years, 15 years, 20 years or 30 years.
  • Guarantee of the benefit. If you purchase a specific amount for a death benefit, then your beneficiary will receive that amount.
  • Your premium will not change. For the term life of the policy, you will not see any increase in cost for the death benefit that you purchase.

 

Universal Life Insurance guarantees:

  • Death Benefit will not decrease
  • Your premium will not change, however, with Universal Life, you may fund the policy with an additional premium. If additional funding is made, the policy may realize an accrued cash value. Cash value is not a guarantee, however.
  • Permanent insurance – unlike term life, this policy is permanent coverage and taking into account our normal life expectancy, the benefit will be there whenever you pass away.

 

Whole Life Insurance guarantees:

  • The premium will not increase
  • Death Benefit will not decrease
  • Accrual of cash value. Cash value can sometimes be used to offset the cost of insurance or can be borrowed against.
  • Permanent insurance – unlike term life, this policy is permanent coverage and taking into account our normal life expectancy, the benefit will be there whenever you pass away.
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