LIFE INSURANCE
There are numerous types of life insurance, but they are broadly classified into two types: term insurance and permanent insurance.
Both will pay an income tax-free benefit to your beneficiaries if you pass away, but with term life insurance coverage only lasts for a limited amount of time (the policy "term" is typically 10, 15, 20, or 30 years). Permanent life insurance policies provide lifelong coverage - the policy will pay a benefit as long as premiums are paid.
Term Life Insurance
Term Life Insurance provides an affordable way to access larger policies in order to help financially protect your family. It offers a death benefit, which is intended to help your beneficiaries replace your income in your absence.
Permanent Life Insurance
Whole Life Insurance
Whole Life Insurance, also known as traditional life insurance, provides permanent death benefit coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value accumulates. The interest on this policy accrues at a fixed rate.
Indexed Universal Life Insurance (IUL)
Indexed Universal Life insurance policies include a death benefit, as well as a cash value accumulation. The (IUL) allows you to earn interest that mirrors the performance of index funds such as the S&P 500, which allows the insured to benefit from the market’s gains tax-free—without the risk of loss during a market downturn.
Final Expense Insurance
Final Expense Insurance is a form of life insurance intended only to cover end-of-life expenses such as funeral and burial costs. The coverage is permanent in the sense that as long as you pay your premiums, the policy will remain in effect; however, these policies do not have any cash value or investment component. Without dependent children, older people frequently purchase final expense insurance because it helps to protect loved ones who might otherwise have to pay these expenses out-of-pocket. While the premiums for these plans are typically low, the death benefit is also modest - it is not intended to provide your beneficiaries with years of financial support.
