Most people have found that applying for life insurance is a lot less scary than just thinking about applying. This is good, because it’s one of the most crucial things you can ever get.
Life insurance can be used for many things. Because of that, this is really where our status as an independent agency shines. With over 170 carriers for life insurance and other financial services, we’re better positioned to act in your best interests regardless of your situation and needs.
That said, there are two main types of life insurance:
Term Life Insurance
Term life insurance provides protection for a period of time, or a term. This type of coverage is significantly less expensive than that of permanent life insurance, but that’s because it disappears as soon as that term is up.
There are options within many term policies, depending on the policy and carrier, to renew it for another term or to convert it to a permanent policy. These almost always re-rate for the increase in age when extending or converting.
In addition, there are also term policies with living benefits. This is the fancy way to say that these policies can pay before you die if you end up getting one of the covered diseases or conditions. This can act like a long term care policy in many cases, despite them not being specifically designed for that.
There are myriad options for term insurance. But if the option you need is more permanent, there’s the other category.
Permanent Life Insurance
If term insurance covers you for a period of time, permanent covers you until you need it — your entire life. Technically, it goes until you reach 100 or 120, depending on the policy, at which time it gives you the cash value of the policy.
There are a number of kinds of permanent life insurance
- Whole life
- Universal life
- Indexed universal life
- Variable universal life (which we don’t offer for various reasons)
All of these build a cash value which, when the policy is drafted according to our company guidelines, increases the death benefit, or total amount the policy is worth.
Many of these can be borrowed against and some of them track various market indices (like the S&P or the Dow Jones) up to a cap when the market goes up, but stay level when the market drops.
These can be used to help supplement retirement, borrow against during lean times, or used to help fund a new house or car purchase. Really, a properly funded and maintained permanent life insurance policy can act as a security net, a financial blanket, or a little more proverbial hay for your nest egg.
One of the most compelling reasons for younger people to pursue permanent policies is because we can add long term care riders, which provide coverage for extended use medical care, for minimal costs while starting to create a retirement solution.
This barely scratches the surface for what term and permanent insurance can do. In fact, many times the best solution for our clients is a combination of both kinds, but that’s only found out through sitting down and reviewing where our clients are, where they want to be, and how long until they want to be there.
If you have questions about life insurance or want to get started, just reach out to us and we’ll help.