Life Insurance

Understanding the differences between

Life Insurance Plans

Term Life Insurance

Temporary insurance is the most common and characteristically most affordable. Coverage is only for a set period of time, ex: 10 yrs, 20 yrs or 30 yrs. Does not accumulate a cash value, but has the highest payout vs. premium in case of a sudden death. The two forms of term are: level term and decreasing term.

Whole Life Insurance

This is permanent insurance with high level premiums, death benefits, and a tax deferred cash value. Essentially there are two values to consider: the face value (aka death benefit) and the cash value that can be borrowed from. There are many different types of whole life insurance, such as Family Income Policies, Modified, Vanishing Premium, Single Premium, Graded Premium, etc.

Universal Life Insurance

Permanent insurance with flexible premiums, death benefit, and accumulation of a cash value. Similar to whole life insurance, there is a cash value associated that can be borrowed from. The cash value is protected by a minimum interest rate. Excess earnings (occurring if the insurance company's portfolio outperforms the minimum interest) are applied to the cash value. The insured can also pay premiums with the interest earned within the policy.

Annuities

As investment vehicles contracted with insurance companies, annuities offer death benefits and certain protections. They are based off of a lump sum investment which then gains interest and is paid out over time. Read more about annuities here.

Variable Universal Life Insurance

Combines features of universal and variable. Offers a death benefit and investment future. One characteristic that makes it a solvent choice for some is the flexibility of premiums, which can be adjusted by the insured.

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Securities and investment advisory services are offered through Sovereign Global Advisors, Registered Investment Advisor and members of FINRA and SIPC

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