Types of Life Insurance
Decreasing Term: Level Premium, Decreasing Coverage, No Cash Value: Suitable for financial obligations which reduce with time; e.g., Mortgages or other amortized loans. Annual Renewable Term: Increasing Premium, Level Coverage, No Cash Value: Suitable for financial obligations which remain constant for a short or intermediate period; e.g., income during a minor's dependency. Long-term Level Premium Term: Level Premium, Level Coverage, No Cash Value: The annual premiums are fixed for a period of time, typically 5, 10, 15 or 20 years. Suitable for financial obligations which remain constant for a short or intermediate period; e.g., income during a minor's s dependency. Whole Life: Level Premium Level Coverage, Cash Values: Cash value typically increases based on insurance company's general asset account portfolio performance. Suitable for long-term obligations; e.g., surviving spouse lifetime income needs,. estate liquidity, death taxes, funding retirement needs, etc. Universal Life: Level or Adjustable Premium and Coverage, Cash Values: Cash values may increase, based on the performance of certain assets held in the company's general account. Suitable for long-term obligations or sinking-fund needs: estate growth, estate liquidity, death taxes, funding retirement needs, etc. Variable Life and Variable Universal Life: Level / Adjustable Premium, Level Coverage, Cash Value: Suitable for long-term obligations and those who are more active investors and for estate growth and death tax liquidity. Single Premium Whole Life: Entire Premium Is Paid At Purchase, Cash Values, Level Coverage: Provides protection as well as serving as an asset accumulation vehicle. |
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In choosing the type of life insurance policy you purchase, consideration must be given to the need which is being filled; e.g., funding retirement needs, creation of an estate, payment of estate settlement costs (federal and state death taxes, last illness and burial costs, probate fees, etc.), business buyout, key-man coverage, etc. © 2010 | All Rights Reserved | Design by Star City Consultants, LLC.