Life insurance meets the needs for people in various stages of life. Razor Insurance Group can help find the policy that works best for you. If it’s a new policy or reviewing an existing one, we are here to find the perfect fit.
There are 3 basic life insurance types:
Term Life Insurance is the simplest and least expensive type of policy, with no cash value. A term life policy has only one function — to pay a specific lump sum to your designated beneficiary, upon the event of your death. The death benefit and the policy limit are the same — for example, a $200,000 policy pays a $200,000 death benefit. The policy protects your family by providing money to replace your salary, income or other contributions, as well as covering final expenses incurred at death.
As agreed in the contract, the premium must be paid, and if you stop paying, the policy ends (lapses.) You won’t owe the insurance company and they won’t owe you a refund for the premiums paid if it lapses before the end of the term.
If you are still alive at the end of the term, you do not get your money back. A term policy is over unless you can renew the policy. If you renew (if the policy has that feature), it will renew at a higher price reflecting your current age. Term insurance has no buildup of cash value as some other types of insurance allow.
Term life insurance is for people who don’t need it for an indefinite period of time. It provides for people who depend on you, but generally ends by the time children are grown and independent, often when the policy owner is ready to retire.
Whole Life Insurance is designed to provide protection for your dependents while building cash value. The policy pays a death benefit if you die. However, there is also a savings component (called cash value), which builds over time. In addition to paying a death benefit, a whole life policy allows accumulation of cash value that you receive if the policy is surrendered.
The premium is fixed and won’t increase during the your lifetime as long as premiums are paid as agreed, for the entire time the policy is in force. The policy pays upon your death or when you reach a specific age stated in the policy.
Whole life policies cost more than term insurance, but have the benefit that the policy builds cash value.
Universal Life Insurance gives you more control over premiums, provides permanent protection for dependents and is more flexible than a whole life policy. It pays a death benefit to the named beneficiary, and allows the ability to accumulate cash value.
Generally, a universal life policy provides flexibility by allowing you to change the death benefit at certain times, or to vary the amount or timing of premium payments.
Both the universal life policy and whole life policy allow withdrawals or loans against the cash value of the policy. Another type of insurance, variable life, offers additional investment options in separate accounts. It also requires that you take time to manage the investments.
Let Razor Insurance Group make your life insurance decisions easier. Call us!