Personal Life Insurance

Life insurance is important to know and talk about, although we don’t enjoy the discussion of death. The many varieties of life insurance are there to provide protection based on the needs and plans of you and your family. While there is a range of types, it all boils down to one important safeguard: risk management. It’s best to think of life insurance as a stability component rather than an investment.

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There are many types of life insurance to fit individual needs and circumstances. Following are some of the basic types of life insurance available:

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Term Insurance – This simpler form of insurance provides coverage for a specific price and fixed amount of time. Term insurance is most commonly used as a safety net for you and your family to help ensure your financial goals are met. If you die during that time, your beneficiary receives the value of the policy. There is no investment component.

 

Whole Life – Similar to term, but you purchase this type of permanent life insurance for lifetime coverage, not just for a set period. Premiums remain level throughout the life of the policy, and the company invests a fraction of your premiums at a minimum. Note that there are firms that will share investment earnings with policyholders in the form of a dividend.

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Universal Life – With this type of flexible permanent life insurance, you decide how much you want to put in over the minimum premium. The company picks the investment vehicle, which is typically limited to bonds and mortgages. The investment and the returns go into a cash-value account, where you can either use that security against premiums or allow it to build.

• Type I or Type A policies: The cash account goes toward the face value of the policy on the death of the policyholder.

• Type II or Type B policies: The beneficiary receives the face value of the policy plus all or most of the cash account.

• Since Type II is meant to contribute a partial hedge against inflation, it requires greater premiums as you get older, than what Type I requires.

 

A variation of a universal policy, often called universal variable life, allows policyholders to choose investment vehicles.

Life insurance is one of the trickier policies to plan for, and Moyer & Moyer is here to help. We want to make sure you and your family takes the time to address what’s going on in your life to ensure you choose the most appropriate type of life insurance. Life insurance is easy to apply for and a quick process. Contact us today to keep your loved ones safe and sound.

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