Individual Life Insurance
Deciding on the right life insurance policy usually depends on your future goals. We can help you choose the policy that will fit your needs at an affordable price.
Individual Life Insurance can be important for:
- Source of savings - some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of “forced” savings plan. Furthermore, the interest credited is tax-deferred (and tax-exempt if the money is paid as a death claim).
- Final expenses - life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.
- Income for dependents - a life policy can provide much-needed income for your dependents when you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government- or employer-sponsored benefits of your surviving spouse or domestic partner will be reduced after your death.
- An inheritance - even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.
- Making a charitable contribution - by making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy’s premiums.
Generally age and health are the most important factors in the premium you will pay. Although you can purchase a policy at any age, the younger you are the more affordable the policies will be. All life insurance policies are designed to pay a benefit when someone dies. The two most common types of life insurance are term and whole (or permanent) policies.
Term insurance is usually the most affordable type of coverage. The term of the policy usually lasts between 1 and 30 years and pays only if a death occurs during the policy term. Most term policies have no other benefit provisions. Term policies can be level term, which means the death benefit will remain the same throughout the duration of the policy, or they can be decreasing term, which mean the death benefit drops over the course of the policy term. When the policy term ends, you may or may not qualify for new coverage based on your health, and based on your age, the cost of the premium may be too high to be affordable.
The advantage of whole or permanent insurance is the death benefit and premium will usually remain the same during the duration of the policy. These policies can also build cash value which may be withdrawn or loaned - similar to a savings account. The 3 types of whole life insurance are traditional whole life, universal life and variable universal life, and there are variations within each type.
Our agents at Dimond Bros. can guide you through the different types of life insurance policies available and help you choose the policy that will best fulfill your unique needs and goals.