Life Insurance

Life insurance can be an important part of your personal safety net, especially if you have financial dependents. Your financial professional can work with you to find easy and affordable life insurance solutions-so you know your loved ones will be taken care of.

Permanent Life Insurance

What is it?

Permanent insurance, including Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance, can provide protection for your entire lifetime, or in certain instances up to a specific age-at which point the insurer pays the policy owner the cash value. Permanent life insurance policies can build a cash value-money that you can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education.

Permanent life insurance policies enjoy favorable tax treatment. Cash value generally grows on an income-tax deferred basis; that means that you pay no taxes on any earnings in the policy so long as the policy remains in force. Withdrawals or loans against the cash value are, in many cases, tax-free.

Who’s it for?

People who...

• May need life insurance for a long term.
• May be interested in accumulating policy cash value to provide funds for education, retirement or other future goals.
• Want to take advantage of the tax-favored treatment of cash value life insurance policies.

Benefits:

• Over time, permanent insurance may be more economical than term insurance since premiums do not increase with age and the policy can build a cash value.
• Policy loans and withdrawals provide access to your cash value.
• Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment.
• If you cancel the policy, the accumulated cash value, minus any surrender charges, is yours to use as you wish.

Things You Should Consider:

• Permanent insurance is initially more expensive than term insurance.
• Loans, including any unpaid loan interest, and cash-value withdrawals generally reduce the death benefit, which could leave beneficiaries inadequately protected.
• If you cancel or surrender the policy, or it lapses, you may have taxable income to the extent that the total of cash value and/or distributions or withdrawals exceed your basis in the policy.

Term Insurance

What is Term Life Insurance?

Term life insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection for a specified period of time, such as 10, 20 or 30 years. If you die within the term period and the policy is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your term life insurance policy is renewed. There is no "accumulation" element, or cash value with term life insurance.

Who’s it for?

• People with a temporary need for life insurance protection.
• Those who need a large amount of insurance protection but have limited budgets.
• People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).

Benefits of Term Life Insurance:

• It provides insurance protection for a low cost (at least initially).
• If your needs change, most term life insurance policies allow you to convert to a permanent life insurance policy without having to take a medical exam or provide other information about your health.
• Term life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses).
• Death benefits are generally received free from income tax.

Things You Should Consider:

• Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value element with term life insurance, so you miss the tax-deferred growth of the cash value of permanent life insurance policies, such as Whole Life Insurance.
• Once the term period expires, unless you renew your policy, the insurance coverage ceases and the policy has no further value

Most insurance policies have exclusions, reductions of benefits and limitations and terms for keeping them in force. Your representative will be happy to provide you with the costs and details.