We know you can’t put a dollar amount on your family, but you can ensure their future is protected. And though costs are a real concern for most people considering life insurance, it never costs as much as you think.
Life insurance is needed for a variety of reasons, the most notable of which are to:
There are a few factors that determine the cost of insurance, most of which are intuitive and include the following:
Term insurance is the easiest to understand and the most popular. Its sole purpose is to address the risk of premature death as it lasts only for a specified term, usually 10, 15, 20, 25 or 30 years. This is the kind of insurance frequently advertised on television or the radio and its primary selling point is that it is “cheap”. You pay less for term because there is a high probability that you will still be living when the term expires, which is why insurers are willing to offer a lower premium for a seemingly high death benefit. Term insurance is normally included as a company group benefit to some extent, so an analysis should be done to compare the rates and benefits offered through employment versus those available in the individual marketplace.
Permanent insurance (also known as cash value insurance) comes in four main forms*: Whole Life, Universal Life, Indexed Universal Life, and Variable Universal Life. Here is a brief explanation of each, in order of risk level.
*Please contact us to learn more about suitability and the risks and rewards of each type of policy.
First, while term insurance covers the insured for a designated number of years, permanent insurance is permanent and will cover the insured until they are 100 or 121 years of age, depending on the insuring company. Second, permanent insurance policies usually accumulate or earn cash through dividends or interest. The cash value may be accessed through withdrawals or loans against the policy, which is often tax-free when done properly. Compared to term insurance, the premiums are considerably higher for the corresponding death benefit, but this is logical because the insuring company has a firm obligation to perform and payout a death benefit throughout the insured’s entire life expectancy as long as the insured makes the premium payments and the policy is not at risk of lapsing. Permanent insurance has multiple uses and can be coordinated with other asset classes.
While most insurance products are similar in price and function, insurance providers vary when it comes to structuring a policy tailored to you. After all, there’s no such thing as a one-size-fits-all insurance policy when it comes to your business.
Contact us today, and we'll help you protect what matters most.