 We at BKC want to help you protect your lifestyle and the ones you love...
Individual life insurance is primarily designed to protect against the financial loss that the death of a loved one or business partner can create. Life insurance provides a death benefit that can provide much needed income to help support your family, your business, or to send your children to college. Additionally, life insurance offers some tax advantages.
|
| Permanent Life or Term Life? |
| There are two types of individual life insurance: permanent life insurance and term life insurance. Both permanent and term life insurance offer an income tax free death benefit to the beneficiary(ies). However, there are several general differences: |
- Provides life insurance coverage for the lifetime(s) of the insured(s).
- Pays a company-guaranteed death benefit to your beneficiary(ies), provided sufficient premiums are paid to maintain the policy inforce.
- Premiums are generally more expensive than for term life insurance because a portion of the premiums are applied toward your cash value buildup. However, the cost of renewing term insurance can eventually cost you more than the cost of purchasing permanent life insurance.
- The policy owner may access the cash value through loans or withdrawals. Both loans and withdrawals will reduce the cash value and death benefit. Loans are subject to interest charges. Under certain circumstances, there may be tax consequences in taking a loan or withdrawal.
|
- Designed to provide life insurance coverage for a specific period of time. To continue coverage after the specified term has elapsed, you may need to reapply for a new insurance policy. At that time,
- the insurance company will again consider your health when determining whether to grant you, the insured, the insurance, unless you have an option to convert to a permanent plan without further evidence of insurability. May not be available after attaining a certain age.
- Pays a company-guaranteed death benefit to your beneficiary(ies) only if you die during the specified term the policy is in force, providing the premiums are paid.
- Premiums are generally less expensive than for permanent life insurance over a certain time span. However, the cumulative costs of renewing term insurance can exceed the cumulative cost of purchasing permanent life insurance initially.
|
A life insurance policy can help in the following ways:
|
- It can protect survivors, including spouses, children, aging parents, beloved pets, or business partners.
- It can pay your end-of-life medical costs and burial costs.
- It can preserve your right to buy more insurance later, when you may have more obligations, but may not have the good health you enjoy today.
- It can provide a legacy to a cause you believe in.
- It can pay off your debts if you should die while you still owe. This type of policy keeps your debts from becoming a burden to survivors.
- It can become a key piece of your long-term financial strategy. Whole life insurance provides an investment opportunity and a future source of low-interest loans. Term life insurance protects a limited term need, i.e., payment of a mortgage.
- It can help you buy the house of your dreams before you have enough savings for the down payment.
|
|
