Life Insurance, along with many other substantial benefits, the core advantage is paying an income tax free death benefit directly to your beneficiary when you die. It also renders options that can reduce taxes, build cash on a tax deferred basis and, if handled properly, allows tax free access to that cash for retirement.

There are two major types of life insurance; term and permanent (which builds cash value).
Term: Is typically purchased for a specific need that has to be covered for a certain period of time, such as during those years your children are growing up. It provides coverage, charging a premium that is lower than permanent but is similar to renting your home rather than purchasing it. You pay premiums for a specified term (10, 15, 20, 25 or 30 years). At the end of the term, the coverage expires (with no equity), and if you want to renew, it must be continued at the rate for your attained age, at that point in time. The renewal premium, from that juncture will go up annually, reflecting your attained age each year, unless you have the ability to qualify medically for a longer guaranteed term. Often, as your age advances, you develop medical problems that could preclude you from being able to do so. It is, at this point, the premium charges for term insurance can become unmanageable.

Permanent (cash value): This type provides coverage throughout your lifetime if you choose to keep it in force. It can build significant cash value that can be utilized for many things, especially tax free retirement income. There are several variations of permanent life, but the most common are whole life and universal life plans. Whole life has guarantees that are present, but are less flexible and more conservative than those associated with other varieties of permanent coverage. Whole life has rigid requirements for premiums that must be paid over the life of the contract, and the cash build-up is typically less aggressive than in other forms. Universal life plans have flexibility of premium payments and can be much more user friendly concerning the treatment of cash values. One very useful type of universal life is called indexed universal life. The cash build up is tied to the growth in the S & P 500 stock index, but is not subject to loss of equity in a down market. To determine which type of life insurance coverage is right for you, contact us at our nationwide toll free number – 800-588-8628.