Unfortunately only 3 out of 5 people have life insurance and sadly out of those people who do, only 30 percent of them have adequate coverage. We pride ourselves on customizing client-based plans that are not only affordable but also leave our clients with complete peace of mind.
Term Life insurance
Term life insurance is a type of insurance that provides temporary coverage for a duration of time then it ends. The duration/term of the policy is determined at the time the policy is purchased. Common term policies last 10, 20, or 30 years. Now you might be thinking what is the upside to life insurance that will eventually end. The upside is that it is inexpensive and allows everyone the opportunity to provide their families with peace of mind regardless of financial situations.
Life insurance is simple, it replaces your income if you pass away and helps your family take care of their financial needs when they can no longer rely on your income. A Lot of times at Top Shelf Financial, we build hybrid plans that offer both Term (temporary) and permanent insurance. In many situations, people purchase term insurance because it will temporarily take care of a temporary need.
Sending children to college is extremely important. If you take out a term (temporary) policy to cover your children’s college expenses while they are young, and the child has completed college, then the need for the amount of insurance has now decreased. In that case, the term insurance expiring is great because you no longer need it.
Another temporary financial need that will burden your family if you pass is your mortgage. If you have a 500,000 dollar mortgage over a 30-year term, it would be amazing to have enough life insurance to cover that mortgage and allow your family to stay in the home you planned on raising them in without the stress of not being able to afford the mortgage.
If you find yourself with similar temporary expenses that may require insurance, or if you want to provide your family with a sizable benefit that is less expensive, term insurance may be for you.
Index universal life Insurance
An index universal life insurance is a permanent life insurance contract with a life insurance company. The plan offers life insurance coverage and savings accounts also known as “cash value”. When the insured invest their premiums a portion compensates for the coverage and other minimal plan expenses, the remaining funds the cash-value account. With different insurance companies, the interest rate potential varies. For example, an insurance company can give their policyholders an interest rate cap of 10% and a floor of 0% This allows the policyholder, to build supplemental savings in addition to other Accounts they may already have.
A scenario where an Index Universal Life insurance plan, can be a great fit into ones portfolio is the following
Universal Life Insurance
A universal life insurance, is a permanent life Insurance contract with a Life Insurance company. The plan offers life insurance coverage and also savings Accounts are also known as “cash value”. When the insured invest their premiums a portion compensates for the coverage and other minimal plan expenses, the remaining funds the cash-value account. Close to the same concept of an Index Universal Life contract, however, there are notable differences between the two policies types. Typically in a universal Life contract, the interest rate potential is much more conservative, unlike an “IUL” the return upside could be capped around 3-5%. One of the benefits to this type of contract is the policyholder can fund the savings in addition to the life Insurance without, exposing his or her contributions to stock market losses.
A scenario where an Universal Life insurance plan, can be a great fit into ones portfolio is the following
Whole Life Insurance
Whole life Insurance, is a permanent life Insurance contract with a life Insurance company. The plan offers life insurance coverage and also a savings accounts also known as “cash value”. This Plan is also apart of the permanent life Insurance family, therefore when this contract is taken out, the Insurance company guarantees, as long as the insured pays the premium for this contract the coverage will be there for the insured “Whole Life”. Whole life is generally focused on the life insurance component of the plan, while it does offer a savings or “cash value” account the option to fund the savings can have many limitations. In recent years Insurance companies have made Whole life Insurance widely available to those who have a pre-existing medical condition(s) which normally would be challenging or not possible to become covered with a universal life or Index universal life contract.
A scenario where an Whole Life insurance plan, can be a great fit into ones portfolio is the following