Whole life insurance is a type of insurance designed to provide coverage throughout your life, with a benefit paid at your death to your family (or the beneficiary of your choosing), as long as you maintain the terms of your contract. For those needing a long-term, permanent type of coverage, whole life may be for you. People buy whole life insurance for various reasons, but the most common are to supplement retirement income, replace lost income for beneficiaries after death, and to help pay for funeral costs. Whole life insurance is unique in that part of your premium goes into a tax-deferred savings portion known as the policy’s “cash value.” This amount is usually guaranteed to grow over time at a minimum rate of return—perhaps around 3%-4% overall–without going down. This is a living benefit that you can draw against while you’re alive.
Term life insurance, also known as pure life insurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate. If you die during the term of the policy, the insurer will pay the face value of the policy to your beneficiaries. This cash benefit—which is, in most cases, not taxable—may be used by beneficiaries to settle your healthcare and funeral costs, consumer debt, or mortgage debt among other things.
Return of Premium (ROP)
Return of premium life insurance is a type of life insurance that will refund what you’ve paid in premiums if you outlive the time limits of your policy. It is a form of term life insurance. Return of premium life insurance is typically offered for a set term, often up to 30 years. You’ll make monthly or annual payments to keep the policy active. If you pass away while your policy is active, the death benefit will be paid to whomever you named as the beneficiary (recipient) on the policy.
Indexed Universal Life
Indexed universal life (IUL) insurance lets the policyholder decide how much cash value to assign to either a fixed account or an equity-indexed account. Indexed Universal Life (IUL) insurance policies are not for everyone, so do your research or speak to one of our agents to find out if this type of policy is a good fit for you.
Final expense insurance is a whole life insurance policy that has a small death benefit and is easier to get approved for.
The beneficiaries of a final expense life insurance policy can use the policy’s payout for any purpose whatsoever.