– Many people only start thinking about life insurance when they get a full-time job and are offered enrollment in their employer’s group life insurance policy.
– Life insurance is a contract between an individual and an insurance company, where the company agrees to pay a specified sum of money to the beneficiaries upon the insured’s death.
– Term insurance pays the death benefit only if the insured dies within the specified term of the insurance contract, and is generally more affordable than other policies. 1. Whole life insurance has consistent premiums throughout the contract but is typically more expensive than term-life insurance.
2. Universal life insurance policies can result in higher death benefits and cash value, but there is also potential for greater risk in the buildup of cash value.
3. Variable life insurance policies are similar to whole life policies, but the death benefit and surrender value are not guaranteed and can increase or decrease depending on the performance of the policy’s underlying investments. – Variable universal life insurance allows policy owners to have control over the types of investments within the policy and offers flexible premiums, adjustable death benefits, and the ability to borrow against the cash value.
– Both VUL and VL policies are subject to Securities and Exchange Commission (SEC) regulations due to the flexibility of their investment options.
– Survivorship life insurance, also known as “second-to-die” insurance, is beneficial for married couples who want to keep significant real property in the family after the second spouse dies, as the death benefit can be used to pay estate taxes. – First-to-die life insurance policies pay out the death benefit when the first of two insured people passes away.
– Insuring two people with a first-to-die policy costs less than insuring them separately.
– Single premium whole life insurance allows a person to buy a specific amount of insurance with a single cash payment, covering them for the rest of their life.
– Cash value of life insurance can have asset protection against future creditors’ claims in some states.
– For assistance with estate planning, people can contact Amanda Dorio at amanda.dorio@henlaw.com or 239-344-1362.
https://www.henlaw.com/news-insights/life-insurance-101-part-1-what-type-of-life-insurance-should-i-get/
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