We ensure better peace-of-mind with life insurance for people of all ages in WA, ID, OR, and CA.
Deciding what life insurance policy to buy can be difficult. When there are so many choices, how do you know what insurance is right for you? The main reason for buying life insurance is to protect your family against loss of income (the income your family would lose if you should die before saving enough money to provide for them).
There are four basic types of life insurance: whole life, term life, universal life, and variable universal life.
Whole life started in England in the 1300’s. It is designed to have insurance for your entire life (whole life). It is the oldest form of life insurance. This is the type of life insurance that financial planners hate since the insurance company controls the money. With this program you get a lot of guarantees: Guaranteed Level Premiums and Death Benefit for life. The premiums are reasonable at younger ages.
This is the type of policy that is advertised frequently with really low rates. The rates start out cheap and then go too extremely expensive as the contract continues. It is designed to cover you for a certain period of time (hence Term Insurance). This is the cheapest in the beginning and the most expensive at the end. Once you are over 70 this type of insurance is unaffordable. This is the most basic type of life insurance.
This type of insurance is a combination of Term and whole life. It gives you the most flexibility. You can do just about anything with a universal life policy. Basically you pay premiums into an account that is managed by the insurance company and part of their balance sheet. The insurance company takes out the pure cost of insurance from this account. They pay you interest like a savings account, but it is higher than your bank will ever pay you and it is Tax deferred savings. Many people use this as a stable investment option in their portfolio. There are some Guarantees depending on the company and product.
Variable Universal Life
Very similar to the Universal life, but in the savings account you can invest in the Stock and Bond Markets. The investments are very similar to Mutual Funds. You have many options in the policy and a lot of investment choices in the separate account. The major benefit is that the insurance company does not own the separate account. It is not part of their balance sheet. There is a greater potential for price fluctuations and the possibility that the account could decrease. The money that is placed in the separate account Grows tax deferred like your retirement accounts, and you can withdraw from it at retirement Tax Free similar to a Roth IRA. This Life insurance is very complex.