Life Insurance
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Term Life Insurance
Term vs Permanent? Which is Best for YOU?
What is Universal Life Insurance?
Whole Life Insurance

Term Life Insurance
Term life insurance provides death protection for a stated time period, or term.
Term life insurance is perhaps the simplest form of life insurance. It was developed to provide temporary life insurance protection on a limited budget. Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals such as life insurance coverage to pay off a loan, or providing extra life insurance protection during the child-raising years.
In most states, term insurance policies provide level premiums for 5, 10, 20, and 30 year periods. These policies can be renewed or continued at higher premiums in most states to age 85 or 95 as stated in the policy (age 80 in New York).

Features of Term Life Insurance

• Initial affordability

• Adjustable premiums: Term life insurance policies have adjustable premiums. This means that insurance carriers may raise or lower premiums at some point specified in the policy based on projected changes of investment earnings, mortality experience, persistency, and expenses. However, premiums may never be raised above the maximum premiums stated in the policy.

• Renewability: Level term policies allow the policyholder to continue coverage past the original coverage period of the policy. Each time the policy is renewed the premium increases to the amount for the then attained age of the insured. This right is usually offered for a specific period, which varies depending on the type of policy.

• Conversion: Conversion allows the policyholder to exchange a term life insurance policy for any permanent life insurance policy offered by the Company at any time while the policy is in force (subject to established policy minimums).

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Term or Permanent: Which is best for you?
Generally speaking, there are two categories of Life Insurance, term life insurance and permanent life insurance. Often, the solution is a combination of both, since most people have a need for both temporary (term insurance) and lifetime (permanent insurance) protection.

To help you decide, consider five basic factors:
• Death benefit
• Duration of coverage
• Premiums
• Cash value
• Net cost of insurance

Death Benefit
Permanent life insurance provides a death benefit for as long as you live.
Term life insurance provides a death benefit for a stated period of time.

Duration of Coverage
The longer period of time that insurance protection is needed, the more consideration you should give to permanent life insurance. For short-term needs, term life insurance may be appropriate.

Examples of permanent needs are:
• Use of death benefit to pay bills or provide money for loved ones
• Use of death benefit to pay final expenses
• Use of death benefit to provide money for a favorite charity
• Use of death benefit to pay estate taxes
• Fund a business buy/sell agreement or provide key person protection

Examples of temporary needs are:
• Use of death benefit to pay educational expenses
• Use of death benefit to pay off home mortgage
• Use of death benefit to pay off an automobile loan

Premium
Permanent life insurance premiums are generally level and payable for life.
Term life insurance premiums will increase over time, are payable for a specific period of time and generally increase at each renewal.

Cash Value
Guaranteed cash values can provide money later to help with temporary needs or emergencies.

Permanent life insurance accumulates guaranteed cash values and may be eligible for dividends:

• The growth in cash values is tax-deferred under current federal income tax law.

• You may borrow against the cash value as a policy loan at the current policy loan interest rate. Borrowed amounts reduce the death benefit and cash surrender value.

• Amounts withdrawn that exceed the cost basis of the policy are federally income taxable.

• Dividends are a return of premium and are based on actual mortality, expense, and investment experience of the company.

• Dividends are not guaranteed, since actual experience is not known in advance. Term life insurance does not accumulate cash values, nor does it earn dividends.

Net Cost of Insurance
The net cost of insurance compares the premium payment and the guaranteed cash value. You get the net cost of insurance by subtracting the total premiums paid from the guaranteed cash value.

For example, compare, over a 20-year period, a term life insurance policy for a 35-year-old male non-smoker and $100,000 worth of coverage with a permanent life insurance policy of the same criteria.

How to choose
Together, you and your broker can assess your Life Insurance needs to help you choose the coverage that is best for you.

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What is Universal Life Insurance?
Universal Life Insurance is a flexible-premium, adjustable benefit life insurance policy that accumulates account value. The flexibility of this policy allows you to change the amount of insurance as your needs for insurance change. Some changes require underwriting approval.

As with all life insurance, the main purpose for buying a Universal Life insurance policy is the death protection provided to your loved ones at your death.
• Learn how Universal Life Insurance works.
• Learn about the coverage amounts and death benefit options on Universal Life insurance.

Benefits of Universal Life

Flexibility -- You decide how much life insurance you need -- and subject to certain requirements and limitations, you can adjust the death benefit and premium payments to fit your changing needs.

Security -- You help protect your loved ones against possible financial hardship in the event of the insured's death.

Tax-Free death benefit -- Under current tax laws governing individual life insurance, life insurance proceeds are generally income tax free to the beneficiary.

Tax-Deferred account value growth -- Your policy's Account Value earns interest at the company's current interest rate -- federal income tax deferred. The current interest rate is guaranteed to be at least 4% a year.

This is a general description of coverage. A complete statement of coverage is found only in the policy.

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Whole Life Insurance
Permanent life insurance coverage for as long as you live and continue to make timely premium payments.

With level premiums and the accumulation of cash values, whole life insurance is a good choice for long-range goals. The guaranteed cash values can provide money later on to help with temporary needs or emergencies.

Features of Whole Life Insurance
• Premiums generally are level and payable for life: Since premiums are level, the younger you are when you purchase a whole life policy, the less expensive the annual premiums will be.

There are also whole life policies that provide shorter premium payment periods, such as 15 years or a one-time payment.

• Dividends: Whole life insurance policies can earn dividends. Dividends result when our actual life insurance costs turn out to be less than we assumed in setting our premiums. When this happens, the insurance carrier may return a portion of your life insurance premium to you as a dividend. Dividends are not guaranteed, since we don't know our actual costs in advance.

• Guaranteed Cash Values: Unlike term life insurance, which does not accumulate any cash values, some of the money you pay into your whole life policy accumulates as guaranteed cash values. If you choose to surrender the policy, these guaranteed cash values would be available to you. Or, as long as the policy is in force, you may borrow against them as a policy loan at the current policy loan interest rate.

The amount of your guaranteed cash value depends on the kind of whole life policy you have, its size and how long you have had it. The growth in cash values is tax deferred under current federal income tax law. Borrowed amounts reduce the death benefit and cash surrender value.

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