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.

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 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.

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.