Life Insurance can Provide Family Protection, Tax-Free Income, and Much More…
Life insurance may be one of the most important purchases you ever make. In the event of a tragedy, life insurance proceeds can help your family maintain their standard of living, create a succession plan for a small business, finance future needs like your children’s education, supplement your retirement income, and more. These are just a few of the reasons many people consider a life insurance policy to be an important part of an overall financial strategy. Different life insurance policies may provide different combinations of death benefit protection and cash accumulation potential.
What type of life insurance policy is right for you?
Generally, the more flexibility in premium payments that a life insurance policy provides (meaning, the more or larger premiums you’re able to pay and when), the greater your potential for tax-deferred cash accumulation. Matching the right policy to your needs depends on finding the balance of death benefit, premium flexibility, and accumulation potential with which you are most comfortable.
Do you want the lowest possible premiums, or would you prefer to pay more and build up your policy’s cash value? Do you need insurance for just a few years, or do you view it as a long-term addition to your overall financial strategy?
Life insurance policies also offer options called life insurance riders which are additional benefits that can be added to your policy for an extra cost. The children’s term rider is one of my favorites because it insures that your child will always qualify for life insurance, regardless of any health issues that arise.
At Abrams Insurance Solutions, we can help you identify the best type of policy for your needs and easily and affordably secure this important protection for your family. Remember that we work for you and not the insurance companies. Our goal is to find you the right policy for your unique circumstances at the lowest price.
Term Life Insurance
Term insurance, the most affordable type of insurance when initially purchased, is designed to meet temporary needs. It provides protection for a specific period of time (the “term”) and generally pays a benefit only if you die during the term. Terms are usually 10 to 30 years, with 20 being the most common. Some policies can be automatically renewed at the end of the coverage period, and some can be converted to permanent insurance without need for a medical exam. Term conversions are common for those people whose health has deteriorated during the term and may otherwise be uninsurable. Please use the quote calculator on the right for an instant term quote.
Life Insurance without a Medical Exam
Are you short on time or looking to obtain a life insurance policy as fast as possible? If so, then Life Insurance without a Medical Exam is the right option for you. A fully underwritten life insurance policy requires you to take a short exam (blood, urine, height and weight) and wait around 4-6 weeks to receive your policy. If you don’t mind paying a few more dollars for your policy, you can skip the exam and have your policy in as little as 15 minutes. We have a wide selection of no exam life insurance companies and will guide you to the best policy without an exam today.
Universal Life Insurance
Universal Life Insurance is a flexible-premium, adjustable benefit life insurance policy that has the potential to accumulate cash value at a declared interest rate. The flexibility of this policy allows you to change the amount of insurance as your needs for insurance change. Universal life is similar in some ways to, and was developed from whole life insurance. The advantage of a universal life policy is in its flexibility and the potential for greater cash value growth during the insured’s life.
Indexed Universal Life Insurance
Indexed Universal Life Insurance is the same as traditional universal life except for how interest is credited. It is based partly on the upward movement of a major stock market index, so when the market does well, so do you. Over the life of the policy, this could mean more cash value and more supplemental income to use for college funding, retirement funding, or other needs. The tax-deferred and potential tax-free benefits of a universal life policy still apply. You also get a guaranteed minimum interest rate, which means while you are taking advantage of the market going up, you will never suffer losses due to the market going down.
Final Expense Life Insurance
Final Expense life insurance, also called burial or funeral expense insurance, provides a death benefit to use for expenses like medical bills, credit card debt, and funeral costs. These are simple and affordable life insurance policies that can provide peace of mind and protect your loved ones from future financial burdens. These policies have a smaller death benefit that ranges from $2,000 up to $100,000 and the coverage lasts for life. Many of these policies are guaranteed issue which means there is no medical exam and limited health questions (if any).
Whole Life Insurance
Whole life insurance is a type of permanent life insurance in which the coverage and the premiums remain the same your entire life. As long as your premium payments are made as agreed, your insurance coverage lasts throughout your life, and the death benefit is a guaranteed amount. When you pay the premiums on a whole life policy, part of each payment accumulates as a cash value. The insurance company typically invests the cash value, which continues to grow tax deferred as long as the policy is in force. Dividends are also typically paid on whole life contracts and can be used to either increase the death benefit or reduce the premiums.
Hybrid Life Insurance and Long Term Care
A hybrid policy includes two types of benefits – life insurance and long term care insurance – all rolled into one package. The long term care benefit amount is typically several times greater than the single premium paid. This allows you to maximize the value of your long term care premium dollar and free up assets that may have been earmarked for other purposes. If long term care is not needed, a life insurance death benefit is paid to your beneficiary. This way you are guaranteed that a benefit will be paid – a life insurance death benefit, a long term care benefit or some combination of the two. A hybrid policy is usually more cost-effective than buying two separate policies and can help you maximize your assets.
How much life insurance do you need?
The easiest way to determine how much life insurance you need is to think of life insurance as replacing your income if you were not here. Your income pays for all of your family expenses including mortgage, college funding and retirement funding. Take your income and (x) it by the number of years your family would need it. The average is 7-10 times your income. This may be less if you have additional assets or more if you want to pay off your mortgage, debt, etc.