Life Insurance is "LOVE Insurance!"

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Life insurance is what responsible people who plan and think ahead buy, when they love someone and they want them provided for if they die prematurely. 

It's bread and butter and self-respect. Life insurance pays a lump-sum, 100% income tax-free so that the people you are responsible for can maintain the quality of life you want them to have. It helps them to pay off the mortgage or rent, or even buy a home outright, skipping the lending process entirely. Or it can at least provide them a buffer, buying them time to make mortgage payments so the home can be sold for its true value, not at a panic discount. It can fund your children's education, wipe out other debts such as car payments, school loans, or credit card bills and pay for basic final expenses like burial/crematory costs or medical bills left for the estate. Life insurance is tax-free CASH when it is needed most so people can mourn without thinking about money problems, and ultimately help them to get on with their lives. 

Life Insurance is extremely affordable, so there are no excuses if you love your family. On average, it only costs 1% of your income to get a good quality Term Life Insurance Policy.

• At bare minimum, people normally want enough to wipe out the mortgage if you have one, and all other debt, with some money left over to help with time to adjust. The last thing grieving widows and widowers want is financial stress of any kind. 
• Beyond that, we concentrate on income replacement, to keep those you love, in their own world. We can't replace you and your affection, but we can provide enough money so your loved ones can continue living in the way they are accustomed, or even a little better, if that's important to you.
• Income replacement can be for a set number of years, or even be designed to protect your loved ones over the rest of their life.

Group Term Life Insurance is great to have, but just think of it as EXTRA, gravy, never as your #1 primary source of protection. Just because you may have some life insurance, or long or short term disability for that matter, does not mean you have the right kind, or ENOUGH. 

• Often these plans are very "cookie cutter" and generic in nature. They do not take into consideration many customized things about your personal individual situation. 
• Also remember, often with group coverage, YOU don't really OWN your own actual private coverage - the employer has a group master policy and THEY have all the control. What if the employer arbitrarily decide to cancel or discontinue providing the coverage? What then? 
• The bottom line is we advise all our clients to always think of group coverage as a bonus, pure gravy on TOP of what you already do on your own. Make sure YOU and ONLY you own and are in control of your main source of life insurance or disability income protection. 

What type of life insurance makes sense? Term Life, Whole Life, Universal or Indexed Universal Life? 

A lot of this will come down to a number of things:

• How much actual death benefit do you need in place to protect your loved ones or for a business situation like a Key Person or Buy/Sell Agreement?

• How long you need the death benefit protection to be in force? Is this a temporary need or situation, or where you want it forever until the day you die. 

• Are you OK with a level death benefit - or do you want one that increases over time to keep up with or outpace inflation over time? All Term policies are level and most permanent policies such as Whole Life, Universal Life and Indexed Universal Life can have a level OR an increasing death benefit. 

• Is it important to you to build cash value, equity, savings inside the policy? If so, Term is out and you will want to look at a permanent cash value policy like Whole Life, Universal Life or Indexed Universal Life (the most popular). 

There are two main camps, or types, TEMPORARY and PERMANENT:

"Term Life" is the most reasonably priced and is used for temporary needs such as paying off a mortgage in X amount of years, or cars, or sending your children to school. Term lasts a specific set of years, like 10, 15, or years, then comes to an end. 

"Permanent Life" comes in a variety of flavors such as Whole Life, Universal Life, and the most popular, Indexed Universal Life. These plans are designed to provide a long term death benefit for your entire life. In addition, they can build significant living benefits, cash values, or equity, you can use while alive on a very tax-advantaged basis. 

Term Life Insurance (TL) is the simplest, most basic, least complicated least expensive, type of policy to start. It is pure efficient level death benefit protection with a level premium guaranteed for a specified period of time, like 10, 15, 20 or 30 years. It does not build cash value, savings or equity It's great when you have a need for a lot of protection and you're on a tight budget. It is good for temporary needs, like paying off a mortgage, or protecting children when they are at home. 

• Term Life covers a temporary period of time, where the premium costs are fixed, locked-in for that period of time, such as 10,15, 20, or 30 years. 
• Term Insurance is the best way to rent a lot of death benefit protection for the least amount of money. 
• Not all Term policies are created equal; there are some important things to consider and look for! 
• In addition to the size, strength and ratings of the insurance company, you also want to make sure it is “Guaranteed Renewable.” This means for a higher price at the end of the term, such as 20 years, you can have it extended. This is important if you are terminal at the end of the term and you need it to last a little longer, so it doesn’t just expire leaving you unprotected with the whole thing feeling like a total waste of money. 
• You may also want to make sure your policy is “Guaranteed Convertible,” which means that some or all of the policy can be “converted” to a permanent long term cash value policy – without having to go through any new medical underwriting; your good health at the original time of application for the Term policy is “grandfathered.” 

Whole Life Insurance (WL) is the world of GUARANTEES and is the most traditional, oldest, original type of "permanent" cash value insurance. Whole Life policies are a good choice for people with a reliable fixed stable source of income who want zero to very little risk with lots of guarantees including a fixed premium that can't go up and a guaranteed cash value, no matter what the market does. 

• They are offered by "Mutual" life insurance companies that only owe loyalty to premium paying policy holders, not stock holders. 
• Whole Life policy gains are tied to the company's general assets which are highly tied to secure high grade government bonds.
• Whole Life is very CONSERVATIVE, dependable and reliable and is designed to provide lots of GUARANTEES:

1. Provide a guaranteed lifetime death benefit.
2. Provide a guaranteed level premium payment that cannot and will not go up. 
3. Provide a guaranteed cash value, i.e. equity built up in the policy by certain years into the policy. 

• In addition to guaranteed death benefits and cash values that already come built-in with the policy, Whole Life policies are ALSO eligible to receive what are called "Dividends" at the end of each year. Essentially Whole Life companies use very conservative projections on what they think they will experience in operating costs and future death claims. Then when things aren't as dismal as they conservatively projected, they end up with a happy profit. Some of this money comes back tax-free to the client as "excess" premium paid, or a "Dividend." These dividends are typically used to purchase even more death benefit, causing the total death benefit to grow larger over time and they also provide extra cash values on top of the guaranteed cash values, giving even more growth. 

Universal Life or (UL) is a type of "Permanent Life Insurance," that is really known for it FLEXIBILITY; you can increase or decrease your premium payments depending on your current situation. Business owners and those with fluctuating income love this feature. UL somewhat of a hybrid between Whole Life and Term Life. Universal Life is great for people who just simply really want long term protection, but aren’t at an age or financial position to want to or be able to use permanent life insurance policy as a way to build equity, savings, cash value. 

INDEXED Universal Life Insurance or (IUL) is by far, the most popular type of “Permanent Life Insurance” today that really emphasizes a way to build equity, savings, cash value, in addition to providing long term death benefit protection. IUL policies are an excellent choice for someone who wants to build up a cash value savings on a tax-advantaged basis, with more opportunity for aggressive upside saving cash value growth than a Whole Life policy, but with guarantees against downside market loss, in addition to the desire for a long term tax-free death benefit that lasts. 

Unlike other investments such as stocks, bonds and mutual funds or even real estate, which is really just GAMBLING, Cash Value policies like Indexed Universal Life and Fixed Indexed Annuities not only protect your principal, but also your gains which are  "LOCKED-IN," and cannot go back down - even if the market does. 

With Fixed Indexed products, such as Fixed Indexed Universal Life, or Fixed Indexed Annuities, this is NEVER a problem. The fact you can capture the upside gains of a stock index like the S&P 500, but without any of the downside market risk is a HUGE part of their appeal.