What Is Life Insurance?
Most people believe life insurance solely provides end-of-life protection. However, life insurance provides financial support for your family and so much more. Certain types of life insurance may help take care of you while you’re still living by helping to cover expenses and replace income. It can also be useful in planning for long-term financial goals that can help you live your best life.
What are some benefits of Life Insurance?
Life insurance can provide protection for your loved ones, help pay off debts, protect your business, cover college tuition, help save for retirement, help with end-of-life expenses, assist with estate planning, and so much more. Below are some of the different types of Life Insurance.
Indexed Universal Life Insurance (IUL)
Indexed Universal Life (IUL) insurance is a type of permanent life insurance that combines a death benefit with a cash value component that can grow based on the performance of a stock market index. You can build cash value as you pay premiums over time or have additional coverage options for you and other family members all on one policy.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance that provides coverage for the entirety of the insured’s life, as long as premiums are paid. Your premiums remain the same for as long as you own the policy. Whole life insurance may be a good fit for you if you desire to leave an inheritance, or take advantage of the opportunity to build cash value for the future.
Final Expense Insurance
Final expense insurance, also known as burial insurance or funeral insurance, is a type of whole life insurance policy designed to cover end-of-life expenses, such as funeral costs, medical bills, and outstanding debts. This is a “budget-friendly” life insurance policy that can be purchased separately or in addition to other policies and used to help cover expenses such as funeral and burial costs. This ensures inheritance money isn’t exhausted on funeral expenses.
Term Life insurance
Term life insurance provides coverage for a specific period — usually between 10 and 30 years — and typically pays a federal income tax-free death benefit to your beneficiaries if you pass away during the policy’s term. It is generally less expensive than permanent life insurance, as it only provides coverage for a set period.
Universal Life Insurance (UL)
Universal life insurance is a type of permanent life insurance that combines a death benefit with a cash value component that grows over time and can be accessed during the policyholder’s lifetime. The interest rate is fixed and not linked to a market index performance, unlike an Indexed Universal Life (IUL) policy. Universal Life provides a stable and predictable way to build cash value and you can adjust the amount and frequency of your premium payments within certain limits.
Annuities
Life Insurance provides protection for your family in the event you pass away. However, an annuity provides financial protection for you while you’re living. With an annuity, you have protection from the risk of outliving your savings, a reliable source of income to supplement Social Security, and Tax-deferred savings options. An annuity is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future.
How much does life insurance cost?
Many factors can affect the cost of life insurance — known as your premium payment — including your age, your financial situation, and more. The Holden Agency will conduct a needs analysis to explore how much you may need.
