Life insurance may not be the most exciting topic to discuss or think about, but it is a critical part to your overall financial plan. If you have someone that depends on you or your income or if you have something that you cherish and want to protect, you should definitely consider owning life insurance. There are many different types of insurance that can be broken down into two main categories: term life insurance or permanent life insurance. Each type of life insurance has uses in your overall financial plan, and many financial planners often recommend a combination of both term life insurance or permanent life insurance.

Tom Fischer is a Life Insurance Specialist in Scottsdale, Arizona.

LIFE INSURANCE POLICY CHARACTERISTICS

 TERM LIFE INSURANCE POLICIES

•  Protection for a limited time – generally to 70
• Low initial premium, but rising with each renewal
• Level Death Benefit, unless a reducing benefit plan
• No cash values will accumulate

 WHOLE LIFE INSURANCE POLICIES

•  Protection continues to age 100, thus the permanent name
• Premium does not increase; may even reduce or cease
• Level or increasing death benefit
• Cash values accumulate on a tax-free basis

 UNIVERSAL LIFE INSURANCE POLICIES

•  Protection continues to age 100
• Premium amount is flexible, may reduce, and could increase
• Death benefit is flexible, can be reduced if desired
• Cash value growth reflects the interest rate environment
• Policy owner may alter structure to suit future needs

 VARIABLE LIFE INSURANCE POLICIES

•  Protection continues to age 100
• Premiums can be fixed, but are generally flexible
• Death benefit is flexible, can be reduced if desired
• Cash value growth reflects equity (stock) environment
• Policy owner may alter structure to suit future needs
• Policy owner may shift investments for diversification

 VARIABLE UNIVERSAL LIFE INSURANCE (VUL)

•  Protection continues to age 100 or 104
• Premium amount is flexible, may reduce or increase
• Death benefit is flexible and may be reduced
• Cash value growth reflects equity (stock) accounts or may be fixed accounts
• Investment allocations may be altered
• Investment deposit allocations may be altered
• Policy owner may alter structure of policy to fit future need
• Premium deposits may be withdrawn on a tax free basis
• Loans may be taken based on policy values, subject to limitations and then current interest charges and credits

 PARTICIPATING INSURANCE POLICIES

Policies are written by mutual (and a few stock) companies in such a fashion as to permit the gains from investments, mortality and operating efficiencies to be passed on to the policyowner.

Tom Fischer is a Life Insurance Specialist in Scottsdale, Arizona.