Term Insurance
Term Insurance is the low-cost, temporary insurance protection. It is
generally used to meet a temporary need (example - mortgage protection) or a
need for a large amount of insurance at the lowest possible initial price.
Important things to consider when buying term life insurance:
- The renewal period. If it's possible that you will need your
coverage after the first renewal period (after 20 years for 20-year term or
after five years for five-year term), be sure to compare both the initial
premium and the renewal premium and confirm whether the renewal rates are
guaranteed at the quoted level. What would happen if your health deteriorated
since you purchased your insurance and you still need life insurance - are you
locked into high renewal rates?
- Conversion privileges. Will you have the flexibility to convert your
term coverage to permanent at some point in the future? If so, are there any
restrictions as to the type of permanent plans you can convert to? Some
companies only allow conversions to specific permanent plans and this can work
against you. Typically, term products set a maximum age for conversion. Ages
vary by company and product. If you don't convert prior to the age specified,
you may be left with no coverage once your term insurance expires.
Speak with a Qualified Professional today to help choose the right Term Life plan for you.
Universal Life Insurance
Universal Life works very well for people who have a permanent insurance need
and want the flexibility and control to change premium levels, investment
options and coverage levels.
Important things to consider when buying Universal Life
Insurance:
- The guarantees. Be sure you understand what is guaranteed and what
is not. Typically, most of the insurance charges are guaranteed in some form,
while the investment side of the product has very limited guarantees.
- The charges. Look at the full package of charges - not just one of
the types of charges. Ask for a total of charges listed year by year, including
the surrender charges in case you choose to give up your coverage.
- Your tolerance with risk. Because universal life has a flexible
investment component, it's more important than ever to be aware of the
investment risk associated with the various investment options and that they
match your risk tolerance. It's crucial that your representative also
understands your tolerance with risk and how you wish to use this investment
component. Do you want to take risks with your life insurance policy or should
riskier investment vehicles be held separately.
- Product illustrations. Insurance representatives often use
illustrations to show how the product works. They are not intended to be an
estimate of future values or for comparing plans between companies.
Speak with a Qualified Professional today to help choose the right Universal Life Insurance plan
for you.
Participating Permanent Life Insurance
Participating insurance works well for people who have a long-term focus and
for people who would rather have the investment component of their policy
actively managed by investment professionals. Also, the investment mix is
long-term in focus and lower risk than policies which utilize a significant
portion of investments in equity-linked accounts. It is primarily invested in
high quality bonds and mortgages. The long-term focus and high quality of the
assets results in a relatively stable return over the long run.
This type of insurance typically has a guaranteed basic premium, guaranteed
basic coverage and guaranteed cash values.
The initial premium for participating insurance is generally higher than for
similar plans that don't offer dividends, but the net cost after receiving
dividends is expected to be lower over the long term. There are a variety of
ways to use the dividends. For example, dividends can be paid in cash or can be
used to buy additional insurance on a tax-advantage basis.
Speak with a Qualified
Professional today to help choose the right Participating Permanent Life
Insurance plan for you.
