Do you know how much you are worth? It’s difficult to think about putting a price tag on a human being. It’s sensitive subject matter. But, people do have value and Hurley Associates professionals are skilled at helping you to determine your human life value. Our professionals will explain the difference between term and whole life policies and develop a strategy that will suit your individual needs.
While life insurance does have many living benefits, for most people its primary purpose is to insure that loved ones will not suffer undue financial hardships in the event of your premature death. Life insurance is designed to provide your spouse with income for life, to create funds for a child’s education, to pay off debt and to ensure financial confidence for those you love. It will not replace the loss of a loved one, but it will be invaluable as it eliminates the stress of final uncertainty and other burdens that fall on survivors.
Don’t wait. This is one of the most important steps you can take to ensure that your family is taken care of financially when you are no longer with them. It can also be a valuable planning tool that provides you with living benefits.
The Four Types of Major Life Insurance Policies
Term Insurance: Without an investment component, term insurance is the simplest form of insurance. Simply put, you purchase coverage for a specific price for a specific period of time. If death occurs during that time, your beneficiary will receive the value of the policy.
Whole Life: You purchase the policy to cover your “whole life” and not just a set period of time. During the life of the policy, premiums remain level and the company invests a portion of your premiums. Mutual insurance companies share investment proceeds with policyholders in the form of dividends.
Universal Life: You decide the dollar amount that you want to contribute over and above the specified death benefit cost. In turn, the insurance company will pay some variable rate of interest. The investment and the returns will be placed into a cash-value account, which you may leave in the account to grow, or use to pay future premiums. With some policies, often referred to as Type I or Type A, the cash account becomes part of the face value of the policy upon the death of the policyholder. Another variety, Type II or Type B, allows the beneficiary to receive the face value of the policy plus the cash account.1
Variable Life: Similar to universal life, except you choose from a wider selection of investment products, including stock funds, with a variable life policy. As with a universal life policy, returns on investments can offset the cost of premiums or be left to grow in the account. Depending on the type of policy, the beneficiaries will either receive the face value of the policy or the face value plus all or part of the cash account.2
1Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), increase in cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies which have a secondary guarantee, but if the secondary guarantee requirements are not met the policy will most likely lapse.
2Variable Universal Life policies provide death benefit protection and are long term investment vehicles with potential cash value accumulation. There are limitations, fees and expenses associated with the policy. All guarantees including the death benefit payments are dependent on the claims paying ability of the issuing company and do not apply to the investment performance or safety of the underlying investment options within the policy.
Investors are asked to consider the investment objectives, risks, charges and expenses of the underlying investment options carefully before completing application, investing, or sending money. Both the product prospectus and the underlying fund prospectuses contain this and other information about the product and underlying investment options. Please read the prospectuses carefully before investing.