Whole vs. Term vs. IUL
Life insurance is a crucial component in securing your family’s financial future. Whether you want to leave something behind for your loved ones or you want simply to help make sure your family’s needs are met, Hamil Legacy can help match you with the right life insurance policy that meets the goals of you and your family.
There are three main types of insurance: whole life, term life and universal life. The primary benefit of a life insurance policy is the death benefit, which is a payment made to your chosen beneficiaries after your death. Permanent life insurance policies such as whole life and universal life also have what is called the cash value, which you can use while alive as a fund that grows to your benefit. You can use it to help pay for long term care and other expenses.
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Whole Life
Whole life insurance is a type of permanent life insurance, meaning your coverage is guaranteed for the rest of your life as long as you continue to pay your premiums. With this coverage, your family will receive a death benefit in the form of a cash payment upon your passing.
Whole life policies also have cash values that can grow over time. It grows along with the market interest rate or a minimum interest rate set by your life insurance company. You can borrow against it, and the money that grows from interest on your premiums may be tax deferred. Remember to pay back those loans, though, or your death benefit will be reduced by the amount you borrowed with interest.
Term Life
Term life insurance policies insure your life for a specified period of time, which is usually 10, 20, or 30 years. If you pass away within that time period, called the term of the policy, your family will receive the death benefit.
Term life policies usually have much lower monthly premiums than permanent life insurance policies because the insurance company takes on less risk when insuring you. These plans are ideal for someone who needs coverage for a set amount of time. Young parents often purchase these plans to provide coverage for their children until they reach an age when they are financially independent. The policy would provide finances to help them through school and allow them to maintain their quality of life.
Indexed Universal Life Insurance
Indexed universal life insurance policies are a type of permanent life insurance policy with low premiums comparable to term life policies. With a standard universal life policy, you pay premiums only up to the cost of insurance. Any amount you pay above the cost of insurance is put aside as cash value.
With an indexed universal life insurance policy, this premium remittance money is put into a fund that grows along with the market: hence, it is indexed. Usually, these plans are tied to indexed funds such as the S&P. While you are living, you can take advantage of the gains made in this cash value.
Choosing a Life Insurance Policy
Life insurance may seem like planning for the worst case scenario, and it is. But the important thing to remember is that your loved ones will want to spend their energies remembering you instead of stressing over finances in the difficult time after you pass. You can help prepare them and ease their worries by purchasing a policy today. Contact Hamil Legacy to learn more about your options and select a plan that works best for you and your family.