Life Insurance it has been said is the greatest financial product ever conceived my the mind of mankind for the solution of financial difficulties created by the death of a loved one or someone in a Key Financial position.
Life Insurance comes in basically two forms - Term Life and Permanent.
Term Life Insurance
Term Life Insurance can and is frequently used to provide maximum Death Benefit for the least premium dollar. It is sold based on premium for a given amount of Life Insurance Death benefit.
Term life insurance is a commodity type of product, sale, and purchase. Needs are usually met by this type of coverage where there is a definitive time horizon for the needed coverage. (Ie. 30-year mortgage, or 15-year business note).
Term Life can be sold with guaranteed level premiums for a fixed duration of time ranging from 1- year to 30 -years.
There is also an available Term Plan with ROP (Return of Premium) which is becoming increasingly popular with buyers. While the overall premiums are higher than straight Term Life premiums they will be generally lower than a Whole Life or Universal Life for the same coverage and guaranteed duration. At the end of the term, say 30-years the customer is entitled to a 100% refund of all premiums paid and this payment will be received 100% Income tax free.
Most Term Life policies will offer a conversion option that will allow the insured to convert their policy to a permanent policy without evidence of insurability. They simply will pay the premiums required for their attained age. If one ultimately plans to convert their Term Life to Permanent it will be less expensive to do this at the earliest attained age possible.
Permanent Life Insurance
Permanent policies come in several forms and then variations of that form.
Whole Life, Universal Life, and Variable Universal Life are common types of Permanent Life Insurance. From these forms we then find Term Life look a likes, Survivorship Life or Second to Die Life.
The differentiating factors between these policies are premium, coverage guarantees, and available coverage riders.
Permanent Life Insurance is used more in the Estate Planning and Wealth Transfer planning arenas where coverage must be in place at the death of the last survivor.
Another area where Permanent Life Insurance sells more than Term is in the Impaired Risk marketplace.
Impaired Risk denotes someone with a significant medical history. Diabetics, Cancer Survivors, persons with Sleep Apnia, Heart Disease and many high Risk Occupations will qualify for better rates with a Permanent Policy.
There are several companies competing aggressively for this type of business by offer Table Shaving programs.
Table shaving is the act of fully underwriting the policy under normal guidelines. If the applicant would ordinarily qualify up to a table 4, the carrier offering the Table Shave would issue the policy in a Standard rate class. Often this Standard rate on a Permanent Life policy will be less expensive than a rated Term Life policy.
Our job is to find you the best rate available. (see What they are saying…)
|
