Life insurance is a way for family members and loved ones to protect those they care about from a financial setback in the event of their passing. Life insurance comes in many different shapes, sizes and with many different options. As an independent insurance and financial services agency, it is important to understand that our agency will be able to shop the market for you to find the best possible fit for your need.
Types of Life Insurance
There are different types of life insurance, each designed to meet different needs and situations. Not all life insurance is created equal, however. It is highly important to have the right type of life insurance and the right amount. Here are the most common types of life insurance:
- Term Life - Term life insurance is often referred to as "temporary" life insurance. The owner of the policy is purchasing or "renting" the policy for a specified period of time, for an agreed upon rate, with a pre-determined death benefit amount. The policy can be converted to a whole life policy in some cases, however if it is not converted it would expire at the end of the term.
- Whole Life - Whole life insurance does not expire and lasts for the length of the insured's life. In some cases, the policy can "endow" at age 100 meaning that the benefit amount will be paid out when the owner reaches that age. Whole life can be purchased for a juvenile by a parent or grandparent or can be purchased later in life and used to build cash value for retirement, to fund an estate plan, transfer wealth, and more.
- Universal Life - Universal life (UL) insurance is permanent life insurance with an investment savings element and low premiums that are similar to those of term life insurance. Most UL insurance policies contain a flexible-premium option. However, some require a single premium (single lump-sum premium) or fixed premiums (scheduled fixed premiums).
- Indexed Universal Life - IUL insurance policies offer tax-deferred cash accumulation for retirement while maintaining a death benefit. People who need permanent life insurance protection but wish to take advantage of possible cash accumulation via an equity index might use IULs as key person insurance for business owners, premium financing plans, or estate-planning vehicles.
Benefits and Uses of Life Insurance
Though it is a good idea for everyone to have life insurance coverage, there are many instances where life insurance is a necessity. As stated previously, life insurance has great flexibility and therefore is beneficial in many different avenues. Below are a few instances where life insurance can add value:
- Family Protection - Life insurance can be used to protect loved ones from a financial setback in the event of an unexpected passing. Life insurance proceeds are often tax-free and can be used to cover final expenses, replace lost income, and pay-off debt. Living benefits can help to cover expenses related to disability, critical illness and cost of long term care.
- Juvenile Whole Life - Purchasing life insurance for a child can be highly beneficial as they age. For instance, a participating whole life policy will pay dividends each year based on the financial profitability of the insurance company. These dividends can be reinvested back into the policy, further growing the insurance amount and the cash value. It is not unlikely for a whole life policy to grow 3-5 times the original face amount of the policy if kept intact throughout the child's life.
- Final Expenses - Some individuals may only need to leave behind $15-20K in life insurance to cover final expenses or funeral arrangements. Another purpose for final expense insurance may be to provide coverage for an individual who may struggle to pass medical exams or underwriting qualifications to purchase a larger term or whole life policy. There are companies who offer guaranteed issue final expense insurance. for those typically 50 years of age or older.
- Key Person Insurance - Key Person Insurance, or "key man insurance", is purchased by a company to help cover business related financial loss if a key executive, owner, or key employee were to pass away. The owner and beneficiary of the policy would be the company. The death benefit could be used to provide financial support, cover lost revenue, pay for hiring or training, etc...
- Buy-sell Agreements - With a buy–sell agreement that is funded by life insurance, the company or the individual co-owners buy life insurance policies on the lives of each co-owner. Thus, if you died, the company or the co-owners would receive the death benefits from the insurance policies on your life. Also, if an individual who has a vested interest in a business wishes to buy the business in the event something happened to the current owner they could use life insurance to fund the buy-sell agreement.
Our Life Insurance Options
Executive Wealth & Risk Management LLC specializes in life insurance planning. We take great pride in being an independent insurance agency that has the ability to shop the market for our clients. This allows us to work on the clients behalf to find the best possible solution to their needs. We are contracted with top life insurance carriers including North American, AIG, Fidelity & Guaranty, Mutual of Omaha, Transamerica, Ethos Life and John Hancock to name a few.
We offer term life insurance, whole life insurance, juvenile whole life insurance, final expense insurance, indexed universal life insurance, universal life insurance, and life insurance with living benefits! Some of our carriers do not require medical exams and all applications can be completed entirely online or over the phone with an agent.