“Which type of life insurance is the best?”
The answer: That depends on your specific needs, circumstances and your objectives.
Below is some basic information about the main types of life insurance that are available. It is important to understand the differences and it is equally important to work with an expert who can guide you towards making the right purchase decisions.
There are many forms of life insurance offered by numerous insurance carriers around the worlds. many factors must be considered when determining what products are appropriate for you and which companies to buy them from.
Not all advisors have your best interest at heart. You want to ensure that your insurance advisor clearly explains the products being offered and how they address your unique situation.
Concierge offers choices and comprehensive solutions to many of your financial planning needs. When applicable, we partner with leading specialists in estate tax law and accounting matters to ensure that the solutions offered achieve the desired effects.
Term Life Insurance – Term life insurance is the most straightforward form of protection. You generally pay premiums on a monthly or annual basis and your family is protected for that “term.”
Whole Life Insurance – A form of permanent life insurance, whole life insurance features guaranteed premiums, death benefits, and cash value. Whole life insurance policies also give you the potential to receive dividends, which can increase the value of the policy when the insured is living or provide an increased death benefit for your beneficiaries.
Universal Life Insurance – Universal Life Insurance premiums are paid into your policy’s account value (after a premium expense charge), where it earns interest. Every month, various deductions, such as a charge for insurance protection, are then made from the account value. You have the ability to take loans or make withdrawals from the account value for your personal needs. Loans accrue interest and unpaid loans plus interest and withdrawals will reduce the death benefit and cash value. The policy continues as long as the cash value is sufficient to cover the various deductions each month. Other forms of Universal Life Insurance, including Variable and Indexed, work similarly but have different crediting methods.
Income Replacement – To provide for surviving spouses and dependent children
Alternative fixed income investment/savings vehicle
Estate Liquidity, when estate has an immediate need for cash to settle federal estate taxes, state inheritance taxes, or unpaid income in respect of decedent (IRD) taxes.
Estate Replacement, when an insured has donated assets to a charity and wants to replace the value with cash death benefits.
Key Person Insurance – To Protect a company from the economic loss incurred when a key employee or manager dies.
Executive Compensation / Pension Plans – An informal funding vehicle where a corporation owns the policy, pays the premiums, receives the benefits, and then uses them to pay in whole or in part, a contractual promise to pay retirement benefits to a key person or survivor benefits to the deceased key person’s beneficiaries.