Personal Insurance

Life Insurance

There Are Many Choices in Life Insurance Policies - Let Resource Group Help You Choose Which One Fits Your Needs.

Why do I need Life Insurance?

In addition to the obvious reasons of providing for the college education of children, or satisfying mortgages and other debts in the event of premature death, there are many other needs to consider, such as:
  • You have worked hard and long all your life to build a sound financial foundation for you and your family. Would you like to protect your assets from burdens imposed by the tax man after you have passed?
  • Would you like to leave an asset or a business to one child, but wonder how to provide equally to other children?
  • Will your business survive without you or your partner?
  • Will your child or grandchild be protected if you and your spouse should die unexpectedly?
  • Would you like to leave a financial gift to a favorite charity or institution after you have gone without depleting what has been bequeathed to your heirs?

What kind of Life Insurance do you need?

Life insurance needs vary depending on your personal or business financial needs for cash in the event of your passing. There are many kinds of life insurance policies, but they generally fall into two categories: term insurance and permanent insurance.

Term Life Insurance

Term life insurance provides coverage for a limited period of time. It is designed for temporary needs. It will pay a benefit only if you die during the term of the policy. It is exclusively a death benefit, which makes sense if coverage is needed for a specific amount of time, such as until your mortgage is paid off or your children graduate college. It can provide for covering your financial responsibilities during the specified term the policy is in force. Term life insurance can be a good option for families with a limited budget, because it allows them to buy large amounts of coverage when their need for protection is often greatest.

Term Life Insurance Points to Consider:

  • Suitable for people with a temporary need for life insurance protection.
  • Useful for people who need a large amount of insurance coverage with a limited budget.
  • People with specific needs (such as protection until a mortgage or business financial obligation is paid off or children graduate from college) should consider Term Life Insurance.
  • It provides insurance protection for an initial low cost.
  • If your needs change, you might be able to convert the policy to a permanent policy.
  • If structured properly death benefits are often income tax free.
  • Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value benefit with Term Life Insurance, so you miss the tax-deferred growth of the cash value of permanent life insurance policies, such as Whole Life Insurance.
  • Once the term period expires, unless you renew your policy, the insurance coverage ceases and the policy has no further value.

Some Questions to Ask When Considering Term Life Insurance:

  • How long can I keep this policy?
  • If I want the option to renew the policy for a specific number of years or until a certain age, what are the terms of renewal?
  • When will my premiums increase? Annually? Or after a longer period of time, such as five, ten, or twenty years?
  • Can I convert to a permanent policy? If so, how many years will this option be available to me and will I need a medical exam if I want to convert?

Permanent Life Insurance

Permanent life insurance includes Whole Life or Ordinary Life Insurance, Universal Life Insurance, Variable Universal Life Insurance and Survivorship or Second To Die Life Insurance. These policies can provide lifelong protection. As long as you pay the premiums, and no loans, withdrawals, or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time. If you don't intend to keep the policy for the long term, this may be the wrong type of insurance for you.

Permanent life insurance policies can build a cash value—and provide money that you can borrow against and in some cases withdraw to help with financial needs, such as paying for a child's college education.

Types of Permanent Life Insurance

"Permanent Life Insurance" actually describes a wide variety of life insurance products that contain the cash-value feature. Within this class of life insurance, there are a multitude of different products. Here we list the most common ones.

Whole Life or Ordinary Life

For someone who prefers premiums that will remain fixed over time, you may want to consider Whole Life or Ordinary Life. This the most common type of permanent insurance. A Whole Life Insurance policy covers you for your entire life, as long as the premiums are paid, and not just for a specific period, which is the case with Term Life Insurance. It is important to note that the premium will always remain the same. Premiums can be much higher than premiums you would pay for the same amount of term insurance, but they are smaller than the premiums you would eventually pay if you were to keep renewing a term insurance policy as the insured ages. Over time, whole life insurance may be more economical than term insurance since premiums do not increase with age and the policy builds a cash value.

While your Whole Life policy will provide you with a minimum death benefit and cash value, it can also give you the opportunity to earn dividends. Please ask us for details about this type of Whole Life policy.

Whole Life Insurance Points to Consider:

  • The policy will build a cash value.
  • Premiums will never increase.
  • If you cancel the policy, the accumulated cash value is yours, but may be subject to taxes.
  • A minimum death benefit is guaranteed.
  • Premiums are initially more expensive than term premiums, however they remain the same for the life of the policy./li>
  • Unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams.

Other Types of Permanent Life Insurance:

Variable Life - This type of insurance provides death benefits and cash values that vary with the performance of a portfolio of investments. You can allocate your premiums among a variety of investments offering different degrees of risk and reward: stocks, bonds, combinations of both, or accounts that guarantee interest and principal. This type of insurance is for people who are willing to assume investment risk to try to achieve greater returns. With variable life you're shifting much of the investment risk from the insurance company to yourself. Good investment performance will lead to higher cash values and death benefits. If the specified investments perform poorly, cash values and death benefits will drop.

Universal Life - This type of insurance gives you the option of adjustable premiums. You can make higher payments when you have extra cash and lower ones when money is tight. This type of insurance allows you, after your initial payment, to pay premiums at any time, in flexible amounts, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under a traditional whole life policy. There is a guaranteed minimum death benefit as long as the premiums you paid were sufficient to sustain that death benefit. Most universal life policies will provide a cash value, but it is important to note that it is possible that you will not accumulate any cash value at all under certain circumstances.

Variable Universal Life - This type of insurance is probably the most flexible of all permanent life insurance products because it combines the investment qualities of a Variable Life policy with the Universal Life policy's ability to pay flexible premiums. However, with this flexibility, there is greater risk. If the investments you choose do very well, you'll have both the investment returns and the insurance protection you desire. If the investments do poorly, your death benefit could be reduced to a pre-specified minimum level and your cash values could be reduced or wiped out. Insufficient premium payments could also cause your death benefit and cash values to drop, or cause the policy to lapse, with no remaining death benefit or cash surrender value.

Survivorship or Second To Die Whole Life - A Solution To Your Estate Needs - the Survivorship or Second To Die Whole Life insurance uses today's dollars to make sure your estate has the liquidity needed to pay estate taxes when they are due. Survivorship Whole Life insures two individuals in one insurance plan and pays the death benefit after the death of the second insured. This Second To Die format is almost always more affordable than if the same two individuals were each to purchase their own policy. These Second To Die policies provide much more than funding for your estate plan. They are also used to help in funding charitable giving, business continuation, estate creation and dependent care needs. It is clear to see how these policies can also benefit young couples and business owners as well as older affluent couples with estate tax problems.

Let the Professionals at Resource Group Assist You and Your Financial Planner in Structuring an Insurance Portfolio That Best Meets Your Needs

Choosing the right life insurance is a critical component in structuring the best protection your family or business needs to safeguard a sound financial future and your legacy. Let us assist you, your financial advisor, attorney or accountant in structuring the insurance portfolio that makes most sense in providing the protection you want - at a premium you can afford.



Important Note - The information on this site is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions and limits of the actual policy. Nothing on this site alters the terms or conditions of any policies. You should read the policy for a complete description of coverage. Coverage options, limits, discounts and deductibles are subject to availability and to individuals meeting underwriting criteria. Not all features available in all areas.