Life Insurance Details
Annuity - An annuity is a written contract between you and a life insurance company. In return for your premiums, the company will pay you an annuity which is a series of payments made at regular intervals. An annuity contract is not a life insurance policy or a health insurance policy. It is not a savings account or savings certificate and it should not be bought for short term purposes.
An annuity is not “risk free” or “guaranteed safe.” It is only as sound as the insurance company which issues it. If you take your money out after a short time, penalty provisions of many contracts mean that you may get back less than you put in.
Life Insurance - When you buy life insurance, you want coverage that fits your needs. You should decide how much you need, for how long, and what you can afford to pay. Keep in mind the major reason you buy life insurance is to cover the financial effects of unexpected or untimely death. Life insurance also can be one of many ways you plan for the future.
There are two basic kinds of life insurance: term insurance and cash value insurance. Whole life insurance and universal life insurance are cash value insurance. Variable life insurance is a cash value insurance as well but not offered by our agency.
Term Insurance - Term insurance covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value.
Whole Life Insurance - Whole life insurance covers you for as long as you live if your premiums are paid. Premium amounts are generally the same for as long as you live. Whole life premiums can be several times higher than you would pay initially for the same amount of term insurance, but smaller than the premiums you would eventually pay if you were to keep renewing a term policy until your later years.
Universal Life Insurance - Universal life insurance is a kind of flexible policy that lets you vary your premium payments and adjust the face amount of your coverage*. Premium payments can be designed to cover short-term needs as well as permanent needs. Many policyholders design their premium payments to end upon their anticipated retirement. From that date on their cash value accumulation is used to keep the policy in force until they die or decide to terminate the policy. This can be a significant advantage over term insurance where premiums must be paid every year until death, or expiration of the policy.
* An increase in the face amount may require proof that you qualify for the new death benefit.
