While nobody likes to think about how life will be when they are gone, the truth is that the best gift you can provide your loved ones with is the security of a financial future – regardless of what occurs.
When it comes to planning for the unexpected, there are two primary types of life insurance coverage that can be purchased. These include term life and permanent life insurance. While both of these forms of life insurance offer a death benefit, there are some key differences in how they work, as well as in what they can offer to the policyholder. Here at Longevity Insurance Brokers, we are here to help you understand what will work best for your needs.
Term versus Permanent Coverage
Overall, term life insurance in Denver, CO, provides death benefit protection only. Because of this, term life insurance policies tend to be quite affordable – primarily if you are young and in good health when you apply for a plan.
However, term life insurance is – as the name implies – sold for only a certain number of years, or “term.” For example, these policies may last for ten years, 20 years, or 30 years. In some cases, a term policy may be renewable after only one year. After that, the coverage may expire altogether, or the premium will increase – sometimes it will increase substantially, based on the insured’s then-current older age.
This differs from permanent life insurance. With a permanent life insurance policy, the insured is covered with a death benefit. However, there is also a cash value component as a part of the policy. The cash within this component is allowed to grow on a tax-deferred basis, which means that there will be no tax due to the policyholder until the time that the cash is withdrawn. This could be at a time far into the future – which essentially allows the funds to grow exponentially over time.
There are many different types of permanent life insurance coverage. These can include whole life, universal life, indexed universal life, variable universal life, and survivorship universal life insurance coverage.
What is Whole Life Insurance?
Whole life insurance is considered to be the most basic of all the permanent life insurance coverage options. With whole life insurance, the amount of the death benefit is typically locked in and guaranteed never to decrease. And, the amount of the premium is also locked, in never to increase. This is the case – even baring the insured’s increasing age over time, as well as whether he or she obtains an adverse health condition in the future.
The cash value that is within a whole life insurance policy is allowed to grow at a set rate of interest. This interest rate is set by the issuing insurance company. Over time, the cash value can grow to a substantial amount.
These funds are allowed to be borrowed or withdrawn by the policyholder for any reason, such as paying off debts, supplementing retirement income, taking a vacation, paying for a child or a grandchild’s college tuition, or any other want or need.
The money is not required to be paid back. However, the amount of funds that are not repaid will be charged against the death benefit that is paid out to the policy’s beneficiary at the time of the death of the insured.
There are many different forms that a whole life insurance plan can take. For example, a participating whole life insurance policy will offer dividend payments to its holders. A dividend is considered to be excess profits of the insurance company. The dividend can be added to the cash value in the policy, or it can be paid out in cash to the policyholder. Alternatively, it could be used to pay for additional insurance coverage. It is important to note, though, that even if a whole life insurance policy is a participating policy, the payment of dividends is never guaranteed.
There are also different ways in which a whole life insurance policy’s premium may be paid. For example, most whole life insurance policies are considered to be “straight life” policies. This means that the payment of the policy’s premium will continue throughout the life of the policy – such as annually, semi-annually, or monthly.
However, there are also whole life insurance policies in which the policyholder may make just one single lump sum premium payment and then have the policy be paid up. These plans are known as single premium whole life insurance policies. In these policies, the amount of the cash value will start out with a substantially larger sum than will a straight life policy.
There are also limited pay whole life insurance policies. These plans offer the ability to make several payments such as 10, after which the policy will be paid up. These plans are designed for individuals who want the protection of a whole life insurance policy, yet do not want to pay premiums for the remainder of their life.
Whole Life versus Term Life Insurance
Those who may be a good candidate for a whole life insurance policy versus a term policy would be someone who wishes to continue coverage for the remainder of his or her lifetime as versus for only a few years.
Term life insurance coverage is often referred to as being “temporary” life insurance. This is because it is limited in nature by its time frame. Therefore, those who purchase term life insurance will do so to cover certain needs such as the balance of a mortgage or the assurance that a child or a grandchild will have funds for future college expenses.
Conversely, whole life insurance can assure a policyholder that they will have life insurance protection for all of their life – provided that the premium is paid. This is the case, regardless of future age and health issues. And, because the amount of the premium payment is locked in, whole life insurance can also be a good choice for someone who is budget conscious, as they will not need to worry about their premium increasing in the future.
When seeking the best whole life insurance policy in Denver, CO, it is always best to ensure that the insurance carrier that is offering the policy is highly rated. This is because the financial stability of the underlying insurer can be essential in whether or not the carrier will be able to pay out its future claims. Checking the insurance company’s ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch can help in this area as an insurer with high ratings is usually indicative of one that is strong and stable financially.
Where to Find Whole Life Insurance for Denver, CO Residents
When seeking the best premium quotes on whole life insurance for Denver, CO residents, it is typically a good idea to work with an independent agency or brokerage that has access to more than just one life insurance carrier. That way, you will be able to more directly compare – in an unbiased manner – whole life insurance policies, benefits, and costs. And, from there, you will then be able to more accurately determine which plan will be the best one for you and your specific coverage requirements.
If you are in need of whole life insurance protection in Denver, CO, we can help. We work with many of the top life insurance carriers in the marketplace today, and we can assist you with obtaining all of the pertinent details that you will require for making a well-informed buying decision. We can do so for you quickly, easily, and conveniently – and all without the need to meet in person with a life insurance agent. In fact, if you are ready to start looking for the whole life coverage that is right for you, all you need to do in order to get started is just simply fill out the form on this page. This makes the process quite simple.
Should you find that you still have any questions, though, we have experts available who can walk you through getting a quote and / or putting a whole life insurance plan together that will best fit your needs. So, please feel free to contact us directly via phone, toll-free, by calling 720-209-4598.
If you are in the Denver, CO, area, and you need whole life insurance, we understand that you may feel somewhat overwhelmed when it comes to choosing the best insurance policy for you. There are many different variables to be aware of – and you want to ensure that you are choosing the right policy for your loved ones’ current and future potential requirements. And, if you do happen to have any health issue, that could also make a difference. But the good news is that you still have many options that are available to you – and we are here to ensure that you find the whole life insurance policy, and the carrier, that is best for you. So, contact us today – we’re here to help.