- Term Insurance pays only if death occurs during the term of the policy, which is usually from 10 to 30 years. Most term policies have no other benefit provisions. Payments are usually level term (the same throughout the policy term) or decreasing term (dropping in regular increments throughout the policy term).
- Permanent (Whole or Universal Life) Insurance pays a benefit whenever the policyholder dies – no matter their age – and typically accumulates cash value.
- A Whole Life policy is “participating,” meaning that it earns dividends which can be used to increase the cash value and/or death benefits, decrease the premiums, or dividends can be refunded in cash. Policy loans against the cash value are available These policies have stipulated premiums and are typically more expensive than Universal Life, but can offer higher cash value accumulation.
- A Universal Life policy earns interest at the credited interest rate determined each year based on the insurance company’s investment portfolio, instead of paying dividends. Universal Live (UL) is more flexible than whole life because the insured can adjust premiums from year to year and sometimes the premiums can even be skipped. Cash Value withdrawals and loans are available. The premium payments can be structured to cease or reduce after a certain number of years. UL is also available in an Equity-Indexed form whereby the accumulation is based on the performance of a chosen stock Index.
- Hybrid or Linked Benefit Insurance Policies combine a permanent life insurance policy with Long-Term Care insurance. A policyholder would withdraw funds from the policy when they are needed for long-term care, and the insurance company pays for care when those funds run out. If the policyholder dies without having needed long-term care, the beneficiaries receive the regular payout.
- Business Loan Insurance will cover payments on a commercial loan if a business owner or key partner dies or is otherwise incapacitated and unable to meet the loan payments.
- Mortgage Insurance is a policy that covers the outstanding principal balance of a loan.
Individual Disability coverage insures income against the risk that an injury results in disability that prevents an employee from completing the core functions of their work. Unlike typical employer-provided disability insurance or workers’ compensation, this coverage is not inherently limited to the nature of an injury.
This individual policy covers long-term healthcare services including Home Health Care, Assisted Living, Adult Day Care, and Nursing Home Services, the cost of which can exceed $100,000 per year. Long Term Care (LTC) coverage can supplement, or be used in lieu of, an employer-provided policy.
This individual plan fills the gaps of Medicare Coverage including deductibles and coinsurance and provides Prescription Drug Coverage.
Annuities allow tax-deferred payments into an investment account, will then make payments to you as a lump sum or incrementally, yet are taxed at your then-current tax rate.
- A fixed annuity accumulates based on the insurance carrier’s declared rate.
- An indexed annuity combines a guaranteed minimum payout with the potential of a higher amount based on the performance of the underlying investment – usually the S&P 500 Index.
Most insurance policies have an inherent cash value, and if you reach a point where an existing policy is too expensive, redundant or otherwise no longer fits your needs, the future benefit can be sold to a third-party for a lump-sum payout.