Life Insurance

 

 

What is Life Insurance?

Life insurance gives you the opportunity to protect your family’s dreams, ambitions, and finances should an unexpected death occur.  It is an agreement between you and the insurance company to pay a death benefit to family members or friends declared as your beneficiaries.   

The Purposes of Life Insurance

The most common purpose of life insurance is to protect the finances of one's family or friends in case of a wage-earner's death, but that's not its only use.  Life insurance can be used:

  • To hire childcare to replace a home-maker's contribution
  • For estate protection
  • For mortgage protection
  • To fund a retirement
  • To protect a business against the loss of a key employee
  • As an employment benefit

Types of Life Insurance

Life insurance is understood best by dividing all types of life insurance into three categories: term life insurance, whole life insurance,  and universal life insurance.

Term Life Insurance requires fixed payments on a fixed schedule and provides coverage for a fixed duration (e.g. 10 years).  The policy only pays a death benefit if the insured individual dies before the policy expires.

Whole Life Insurance requires fixed payments on a fixed schedule.  These policies guarantee coverage up to a certain age (usually 100 years of age).  These policies guarantee a death benefit, so even if the insured individual outlives the policy, a death benefit will still be paid.  These policies carry cash value, which means that they can be liquidated.

Universal Life Insurance allows payments of any amount at any time (up to certain government-stipulated maximums).  Coverage from these policies can be maintained indefinitely.  These policies carry cash value, which means that they can be liquidated.

Indexed Universal Life allows payments of any amount at any time (up to certain government-stipulated maximums). Coverage from these policies can be maintained indefinitely. These policies carry cash value, which means that they can be liquidated. Index Universal life insurance is becoming increasingly popular for college funding and for tax-free retirement planning.

As life insurance brokers, the professionals at CBU have the ability to find you the best plan to fit your income and lifestyle.  Contact us today with questions or to set-up a free life insurance consultation.