A Life Insurance policy provides you with a sense of security knowing that your loved ones have financial options if you were to suddenly pass away. The types of policies we offer are Term Life Insurance, Whole life insurance and Indexed Universal Life Insurance. You will find a breakdown of all three types of policies below.
Indexed Universal Life
Term Life Insurance offers four important advantages:
1. Less Expensive - Term life insurance rates are more affordable than whole life because it offers protection for a predetermined period of time.
2. More Flexible - You have many options with Term Life Insurance.
3. Good for young families
Term Life Insurance is designed to provide death benefits to the named beneficiaries of the policy holder. People typically buy Term Life Insurance to cover the cost of living for their families, as well as large expenses like college tuition, in the event that they pass away during a specified term.
One of the primary benefits of Term insurance is it's initial lower cost when compared to permanent insurance. The reason it's cheaper is that with a term policy, your typically just paying for the death benefit - the payment your beneficiaries will receive if you pass away during the term of the policy.
Whole Life Insurance is a cash value type of Life Insurance policy that provides protection during your entire lifetime and offers two key benefits:
1. Whole Life Insurance is also known as (straight life) and (permanent life insurance)
2. A Whole Life policy covers you for your entire life, not just for a specific period. (such as Term Life Insurance). Whole life insurance policies apply the premiums paid into both the savings or investments and the life insurance death benefit. Whole life insurance is similar to Universal Life Insurance which also lasts your whole life.
Whole life Insurance lasts for a policy holder's lifetime, as opposed to Term Life Insurance, which is for a specific amount of years.
Whole Life Insurance is paid out to a beneficiary or beneficiaries upon the policy holder's death, provided that the premium payments were maintained.
Whole Life Insurance provides a death benefit but also a savings component where cash can build up.
The savings component can be invested. Additionally, the policy holder can access the cash while alive, by either withdrawing or borrowing against it, when needed.
One of the most attractive features of an Indexed Universal Life policy - (IUL) is the ability to take advantage of stock market returns without the risk of loss. And it does so while building up a death benefit that your beneficiaries will receive tax-free.
Other benefits of Indexed Universal Life insurance include:
1. Unlimited Contributions
Traditional retirement avenues such as IRAs have limits on contributions but IUL's don't.
2. Tax-free growth & distributions:
"IUL distributions are Tax-free vs. Tax-deferred in the other vehicles."
Says Chris Abrams. an IUL expert at Abrams at Insurance Solutions. That means you don't have to pay taxes on the money you eventually draw from the cash value of the IUL. It's similar to a Roth IRA in this respect.
3. Use at anytime:
With regular retirement programs, you have to wait until you hit the 59.5 minimum age for distribution before you can start taking money out. With an IUL, there is no age requirement.
4. Death Benefit:
A Tax-free death benefit is distributed to your beneficiaries, which means it won't face income or death taxes.
5. Loan Availability:
Depending on your policy and available cash, you can borrow money from your IUL without facing penalties, taxes or a credit check. You also do not have to pay back the money you take out.
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