R.P. Jones Insurance

Permanent Life Insurance

 

Permanent Life Insurance

Generally more expensive (initially) than term life insurance products. Best suited for those ready to provide protection beyond basic debt repayment, or who wish to lock in their rate and coverage more permanently.  Can be considered “when I die” coverage whereas term life insurance might be considered “if I die” coverage.

 
  1. Whole Life:  Higher premium contract which guarantees the cash value to equal the face amount at some future age, typically 100 or even 121 in newer policies. Face amount and premium generally level for life, or can be paid earlier (i.e. 10 pay, 20 pay or paid up at 65, etc.)
     
  2. Universal Life: Called Flexible Premium Life Insurance.  Premium (and often death benefit) are flexible (can be changed).  The tradeoff for the flexibility is that the client assumes the risk for cash value performance. Cost of insurance increases annually, and if premiums are not sufficient to maintain policy values, a Universal Life policy will lapse.
     
  3. Indexed Universal Life: Similar to a Universal Life policy, with a portion of the policy cash accumulation being credited based on financial market performance.
     
  4. Guaranteed Universal Life:  Universal Life policy (and some Indexed U.L.s) offering a guaranteed death benefit to a specified time or age. NOT GUARANTEED ISSUE !!  Less costly than whole life insurance for someone wanting pure death benefit with no concern for cash values.
     
  5. Second to Die Universal Life / Whole Life: Policy insuring two lives (generally spouses) but paying the death benefit upon the second death, not the first.  Almost always used for estate preservation purposes, leaving families the funding to cover estate and probate fees and taxes.
     
  6. First to Die Universal Life / Whole Life:  Policy insuring two lives (generally spouses) and pays upon the first death.  Excellent tool to pre fund both funerals and provide a surviving spouse with additional funds. Often less expensive than paying for two separate policies, too!
     
  7. Single Premium Whole Life / Universal Life: Pay one premium and your policy is paid for.  Savvy Insureds utilize this excellent tool for transferring wealth to beneficiaries.  Also, intelligent option for final expense planning as it is generally much less expensive than a pre-paid funeral.