Life insurance is purchased for any number of reasons, and there are several different life insurance policy options available today. Typical needs for life insurance include:
- Family income protection
- Business succession planning and key employee protection
- Estate liquidity to satisfy future tax liabilities
- Equitable estate distribution among children involved with and outside of a family business
- To provide lifelong care and support to children with special needs
Whether it’s used to protect your wealth or minimize the financial impact of your death, life insurance is a strategic asset that plays a critical role in your overall financial planning.
Businesses often utilize term insurance to cover the owner(s) as a means to allow the surviving partners or family members buy back stock in an arranged buy-sell agreement. Also they use term insurance to provide coverage on key employees and cover any debt obligations, or as collateral for financing.
Our commitment to our clients is to remain educated on the most current products, and leverage the many underwriting relationships we have to ensure our clients achieve the best rates possible.
Life Insurance Products
- Level Premium Term Life Insurance
- No Lapse Universal Life Insurance
- Whole Life Insurance
- Second to Die (Survivorship) Life Insurance
Level Premium Term Life Insurance
Term insurance pays a death benefit if the insured dies during the term of the policy. In essence you are renting life insurance protection and for that reason this type of insurance has the lowest annual premium outlay.
Most term policies today are available for 10, 15, 20, 25 or 30 years with some insurers offering policies that go out as far as 40 years. The policy owner can cancel the policy at any time they like with no penalty but the insurer cannot make any changes to your policy as long as you continue to pay premiums.
What should clients look for in a term policy?
- An insurer with high financial ratings with strong claims paying ability.
- A convertibility feature which allows the insured to exchange their term policy for permanent life insurance without showing any evidence of insurability.
- A policy with an accelerated benefit or chronic illness feature which allows the insured to gain access to the death value while still living in the event of a terminal or chronic illness.
No Lapse Universal Life Insurance
These policies are most often utilized by our Estate Planning and Business clients who are seeking permanent and contractually guaranteed lifetime insurance protection at much lower cost than traditional cash value whole life. The premiums are higher than term insurance but the benefit is that the coverage can’t be outlived. The policies can be designed to have premiums paid for a specific period of time, for example a single payment, 10 payments, 20 payments, or payments until death. The insurer guarantees that as long as the premium is paid when due, the death value will be guaranteed regardless of how long the client lives.
Whole Life Insurance
Traditional Whole Life insurance provides lifetime death benefit protection with guaranteed cash values and fixed premiums. Many of these policies issue dividends annually which our clients often use to offset future premium obligations. Dividends are never guaranteed, merely projected. Some of the benefits of whole life insurance are tax-deferred cash value accumulation, income tax-free death benefit and cash values can be accessed either through partial policy surrenders or loans. It is important to identify a strong mutual insurance company with a history of solid dividend payments when assessing the right insurer for your policy.
Second to Die (Survivorship) Life Insurance
Second to Die life insurance is coverage on two individuals, generally spouses, which pays a death benefit when the second of the two insured’s dies. These policies are most commonly set up as no lapse universal life insurance. The benefit to these policies is that they have lower premiums than single life policies do, and it’s a way to get coverage on an uninsurable individual if the other insured is in good health. Second to die provides the immediate liquidity needed to satisfy any estate tax obligations or other debts, income tax free.