Kailey Veras Financial Planning pd. 5

Life insurance is insurance that pays out a sum of money either on the death of the insured person or after a set period.

To provide for your independents if you die Life Insurance can be a good investment You can sell your policy for emergencies You can accumulate cash through your policy

A person who derives advantage from something, esp. a trust, will, or life insurance policy.

It is meant to benefit your dependents and/or people within your family

Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time

Advantages You are providing death benefit; your love ones can still be financially protected even though you’re gone It is inexpensive and very affordable Term insurance can guarantee that your estate is not depleted by estate taxes upon your death You are able to have a high amount of coverage for a low price Disadvantages If you do not die within the time you’re policy is open, you do not receive the money from the insurance company

Whole life insurance is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy

A type of flexible permanent life insurance offering the low- cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums.

Advantages Permanent life insurance is a policy that will be on-going for the rest of your life Flexible payments means you will be putting money into it either all at once, in a single lump payment, or every month The money you put into a permanent life insurance policy accrues and earns interest, either through a rate offered by your insurance provider, or from interest earned by the cash value of your permanent life insurance being invested in something like the stock market You can start accessing the cash value of your permanent life insurance policy once it builds value A great way to plan for retirement Disadvantages The biggest disadvantage to a permanent life insurance policy is the cost You may already have outside retirement investments linked to the stock market

Advantages Term Life Insurance You are providing death benefit; your love ones can still be financially protected even though you’re gone It is inexpensive and very affordable Term insurance can guarantee that your estate is not depleted by estate taxes upon your death You are able to have a high amount of coverage for a low price Whole Life Insurance Permanent life insurance is a policy that will be on- going for the rest of your life Flexible payments means you will be putting money into it either all at once, in a single lump payment, or every month The money you put into a permanent life insurance policy accrues and earns interest, either through a rate offered by your insurance provider, or from interest earned by the cash value of your permanent life insurance being invested in something like the stock market You can start accessing the cash value of your permanent life insurance policy once it builds value A great way to plan for retirement Universal Life Insurance Flexible No need for renewal of policies Cash Value Accumulation Disadvantages Term Life Insurance If you do not die within the time you’re policy is open, you do not receive the money from the insurance company Whole Life Insurance The biggest disadvantage to a permanent life insurance policy is the cost You may already have outside retirement investments linked to the stock market Universal Life Insurance Expensive

Whole Life- With whole life, the insurance company promises to pay a certain death benefit upon your death, regardless of when that occurs, up to a certain agreed-upon age based on mortality and expense projections, along with dividend scale assumptions. Universal Life- The biggest difference between Universal Life (UL) and whole life is that UL gives you considerable flexibility as to the amount and timing of premium payments. And the face amount of coverage can be changed (down at any time, up with evidence of continued insurability). Variable Life and Variable Universal Life- Variable Life and Variable Universal Life policies provide death benefits and cash values to beneficiaries. But here’s the crucial difference: whereas the premiums paid into most standard UL polices earn interest within a life insurance company’s General Account, as it’s known, Variable Life policies earn interest on a portfolio of investments that you as the policy owner choose from a selection offered by the company

It whatever the policy coverage is. For example if your spouse has a coverage for $1,000,000.00, if he dies the beneficiary receives $1,000,

If you have whole life insurance, the money that accumulates in your policy is your cash value. That money can be withdrawn and is tax deferred.

You receive cash value which was the money being accumulated within your account

Determine total short term needs in the event of your untimely death Determine total long term needs in the event of your untimely death Determine total resources available to family members Provide insurance coverage for any remaining shortfall loan balances (automobile loans, etc) outstanding credit balances (credit cards, revolving lines of credit, etc) mortgages (first mortgage, second mortgage, equity loans) funeral expenses final medical costs estate settlement costs estate taxes due charitable bequests you would like to make at death a future income stream to cover standard of living items (college expenses that you would like to cover for your dependents) elderly care expenses you plan on contributing for relatives monetary support for a disabled dependent mortgages (first mortgage, second mortgage, equity loans) child care costs if your spouse will work after your death