Home > Individuals & Families: Solutions > Life Insurance

Life Insurance

Life Insurance
Life insurance is most commonly known as a way to ensure that loved ones are taken care of in the event of a person's death. Many people don't know that life insurance can also offer a source of income later in life.

What should you know about life insurance? Here are the facts:

  • There are two basic types of life insurance: term life insurance and permanent life insurance.
  • Term insurance works somewhat like car insurance: You pay premiums that provide coverage for a certain period of time. If your death occurs while you are covered, the beneficiary of your policy will receive a predetermined death benefit. The premiums in a term insurance policy are often cheaper than those in a permanent policy, but usually become more expensive over time.
  • Permanent insurance may be more expensive than term insurance, but it can offer significant benefits, including guaranteed premiums, flexible payment options, and investment opportunity. There are four major types of permanent life insurance:
    • Whole life insurance offers the most guarantees of any kind of life insurance. The premiums will never increase. The death benefit will never go down (unless there have been any loans or withdrawals taken). In addition, whole life insurance policies have a guaranteed cash value, which can be borrowed against. This living benefit can be used as an emergency fund or to supplement retirement income.
    • Universal life insurance provides a guaranteed death benefit while also offering flexibility with premiums. The policy holder can vary the amount paid each month, as long there is enough money in the account to pay for certain minimum insurance and maintenance charges. Depending on how much money accumulates in the account, the policy may also accumulate tax-deferred cash value.
    • Variable life insurance allows a high degree of flexibility with premiums, including the option to direct a portion of premium payments to a separate account, which can serve an investment vehicle. This can allow for the possibility of greater growth in cash value, but it can also entail a greater risk.
    • Survivorship life insurance covers two people on the same policy. These policies are often cheaper than insuring an individual, but death benefits are not paid until both covered individuals have died.

We're Here to Help

Need to talk? Let us get in touch.

Copyright © 2014 by Broad River, Inc. All Rights Reserved. | Privacy Policy | Contact Us