What are the different types of life insurance and which is the best solution for me?
Term insurance - offers life insurance protection for a specified period of time, such as five, ten or twenty years. Benefits include:
Affordability; provides insurance protection with relatively low premiums
- Tax-free death benefits; proceeds from term insurance can be paid directly to the beneficiary tax free,
bypassing the estate and probate delays
- Creditor protection; term insurance may be protected from claims of creditors
- Multiple lines covered under one policy; more than one person can be insured on a single policy
- Conversion options; clients may convert plan to universal life or a permanent plan without providing
evidence of insurability
- Joint coverage; term insurance can be purchased on multiple lives
- Optional benefits; may include, children's insurance, accidental death and dismemberment, and waiver of
premium
Whole Life - A whole life insurance policy is designed to provide insurance protection for your entire life, with built-in savings elements, provided premiums are paid as specified in the policy. There are two major types of whole life; participating and non-participating. Participating whole life insurance participates in the dividends earned by the insurance company and appeals to people who are not interested in managing day-to-day investment risk and are attracted to the historical stability of the insurance companies. Non-participating whole life insurance does not participate in the dividends earned by the insurance company, has less flexibility compared to participating policies and is mainly concerned with protection only. A typical non-participating policy is a Term 100.
Equally important are the guaranteed inheritance in a whole life policy; level premium guaranteed for life; level death benefit; and guaranteed cash surrender value increasing over time with participating policies.
Universal life - combines permanent life insurance protection with benefits of tax-advantaged investing.
To learn more about life insurance why not consult with one of our experts at MAP Insurance.