A Vessel of Financial Confidence for Yourself & Your Loved Ones
A life insurance policy is the foundation of a well-built financial strategy. While no one likes to consider that they will pass on, it is inevitable. One must consider the financial burden that surviving family members may face in the event of an untimely passing. Life insurance is also a tool that can be used for addressing financial concerns in the event of a timely passing. For instance, if your estate is more than the federal exclusion from estate taxes, life insurance can provide means to pay those taxes and preserve the value of the estate. Life insurance can also be the means to grow an estate by accumulating cash value. The cash value can be accessed later in life when needed. Life policies may also include long term care riders that can be used when and if an extended care situation were to arise later in life.
An appropriately structured life insurance policy can accomplish many goals. But in most cases, it is there to provide your surviving family the ability to continue their lives as if you were still providing for their daily needs. Those needs include funeral costs, paying off the mortgage, funding your child’s education, and providing an income source for those left behind.<br /> At Pender & Associates we understand that choosing a life insurance plan that encompasses your needs is a big decision and that there are many important factors that an individual seeking coverage needs to consider. Our well-versed staff of insurance solution professionals is committed to helping you through the process in its entirety and delivering the step-by-step approach you deserve when it comes to picking the plan that is right for you.<br />
Varying Types of Individual Life Insurance
When it comes to life insurance, Pender & Associates offer a variety of different life insurance policy options for consideration when looking to purchase coverage.
Coverage options for Individual Life Insurance Include:
- Term Life Insurance
- Universal Life Insurance
- Variable Universal Life Insurance
- Whole Life Insurance
Term Life Insurance
In most cases term life insurance is the most straightforward and affordable coverage option. A term life insurance policy delivers coverage at a fixed rate over the span of a specified period. This benefit policy is typically used to cover any financial responsibilities of the insured should the insured pass away during the specified term of coverage. Most term life policies have the flexibility of conversion to more permanent life insurance solutions such as universal life, variable life, or whole life insurance.
Term Life Insurance can be divided into two sub-categories:
- Annual Renewable Term Life Insurance – this variety of term life insurance is purchased once yearly, with the option of renewal after the term period. Rates will increase more rapidly with age. If premiums are not paid, coverage will lapse.
- Level Term Life Insurance – this type of term life policy guarantees a fixed premium over a given amount of time. These term periods are usually offered in spans of ten, fifteen, twenty, twenty-five and thirty years. The monthly premium and availability of coverage is based on factors such as the age and health of the applicant, and the length of the term (generally, the longer the term the costlier the premium). At the end of the level term, coverage can be renewed for the coming year but rates are usually very expensive. Most term life insurance policies include a conversion option which allows the policy to be converted into a Universal or Whole Life policy with no medical underwriting.
Universal Life Insurance
Universal Life Insurance policies are designed to be the most flexible when stacked against other types of permanent individual life coverage options. The insured individual is guaranteed a death benefit during the duration of the policy as well as savings that accumulate cash value over time. This type of plan offers the most flexibility, having the ability to change certain aspects of the plan to accommodate life changes.
Depending on the options written into the plan, individuals have the flexibility to make amends to the overall value of the death benefit as well as the timespan and amounts in which the premium is paid. These included options give individuals the ability to focus on key aspects surrounding their policy such as: increasing the policy’s cash value, or paying a lower premium while still having the advantage of protection that is guaranteed. However, it is important to note that when making alterations to a universal life policy, these alterations can impact the policies limits, guarantees and tax status.
Variable Universal Life Insurance (VUL)
In considering a variable universal life (VUL) insurance policy individuals are presented with similar flexibility to that of the universal life insurance policy, but also have the added advantage of profiting from the potential of economic growth in the stock market. On the other hand, you also assume the risk that market declines could diminish the value and life expectancy of the insurance policy. Rather than creating a cash value for savings as is the case with Universal Life, the value associated with your VUL policy is invested into shares of professionally manage exchange traded funds that directly reflect the performance of the stock market. With some VUL policies, the insured assumes the risk and responsibility of monitoring their own investments.
Whole Life Insurance
When it comes to individual life insurance policies the whole life policy is the most commonplace permanent coverage solution. A whole life insurance policy guarantees a paid benefit in the event of death for the lifetime of the insured individual as well accumulating a cash value. The paid premium for this policy remains constant throughout the duration of an individual whole life policy, however, should payments be made over the premium amount these payments are added to the cash value savings account associated with the policy. Whole life policy associated savings accounts earn a fixed interested rate throughout the duration of the coverage.
Pender Benefits offers the helpful solution.
There certainly are many factors to consider when purchasing life insurance. Changes in life situations can directly reflect changes to your individual life insurance coverage requirements. It is extremely important to consider the differing individual life policy options to ensure that you choose the right coverage that sufficiently coincides with your long-term life insurance requirements. Let Pender & Associates assist in designing a policy that best suits your estate and family needs.
