Term Life Insurance

What is term life insurance?

With term life insurance, you pay a premium over a specified period of time, which is typically one to 20 years and it does not accumulate any cash value in the policy. Your death benefit or face value can be selected to meet your needs. And if you die during the term, the face amount of your policy will be paid to your beneficiaries. Term life insurance is ideal for young families who may be on a tight budget, because it offers the greatest amount of coverage for the lowest initial premium. Term is also a great choice when your need for coverage will disappear at some point, such as when debt is paid off or when a child goes to college.

Why would I want it?

Because you want to ensure that your family will have what you're working so hard to provide - a home, a college education, the resources to live in comfort - should something happen to you. A term policy provides an excellent opportunity for you to do this - even if you're just starting out - because such policies do not accumulate cash value and usually offer lower premiums than other life insurance products with the same face value.

Whole Life Insurance

What is whole life insurance?

With whole life insurance, you own your policy for your entire lifetime. You have the flexibility to select the amount of the death benefit or face value, depending on your needs. And as more premiums are paid, cash value accumulates, growing on a tax-deferred basis. Although the monthly cost of whole life insurance is higher than term life, for example, you gain equity with each payment you make.

In essence, whole life is like buying a house versus renting it. The monthly cost is higher than it would be for a term life policy, but with each payment you make, you gain "equity."

Why would I want it?

Because you want to ensure that your family will have the money necessary to live in comfort, purchase a home, pay for college, and so on, should something happen to you. At the same time you want to have a policy that you own for your entire lifetime and accrues cash value, which you can borrow against for any purpose. Loans, however, require you to pay interest and any borrowed amount you do not pay back is deducted from the payout to your beneficiary at the time of your death.

Variable Life Insurance

What is variable life insurance?

With variable life insurance, which is also permanent, you are able to invest a portion of your premium in various sub accounts, allowing you to potentially increase the policy’s cash value. The performance of these investments is not guaranteed, which means there is investment risk involved. The total benefit pool and account cash value will increase or decrease depending on the fluctuations of your investment options, premium payments, and non-guaranteed policy changes. Variable life insurance provides the flexibility and control of universal life, with more cash value potential.

Variable life insurance products have life insurance-related charges, including surrender charges and investment management fees. They are also subject to investment risk, including loss of principal, and part performance is not a guarantee of future results. In addition, under performance of the sub-accounts may cause the policy to lapse7, which makes life insurance not suitable as a short-term saving vehicle.

7 Lapse or surrender of a policy may cause the recognition of taxable income.

Why would I want it?

Because you want to ensure that your family will have the money necessary to live in comfort, purchase a home, pay for college, and so on, should something happen to you. At the same time, you want flexibility and control.

You want a policy that's permanent and accrues cash value, which you can borrow against for any purpose. You want to be able to borrow or withdraw funds from your account on a tax favored basis, which you can do in most cases - provided your policy remains in force. You want the option to add to your account value by paying an amount above your regular premium. You want the potential to earn a higher rate of return on your account investments, even though your rate of return could also drop.

Universal Life Insurance

What is universal life insurance?

Universal life insurance is permanent insurance with the potential to accumulate cash value. As your needs change, you are able to increase or decrease your policy’s face amount, as well as the dollar amount of your premium payments. You can also make lump-sum payments to your policy. If you’re looking for a permanent policy that has the potential for cash value accumulation, universal life is right for you. This policy is ideal if you are looking for both flexibility and control.

Why would I want it?

Because you want to ensure that your family will have the money necessary to live in comfort, purchase a home, pay for college, and so on, should something happen to you. At the same time, you want flexibility and control.

You want a policy that's permanent and accrues cash value, which you can borrow against for any purpose. You want the option to skip premium payments, which you can do if your account has accrued sufficient value. You want the potential to earn a higher rate of return than a whole life policy, even though there's a risk that your rate of return could drop.