Trinity IFS

Life Insurance

Protecting the ones you love

 

Protecting those that you love, that’s what it’s about. Below we provided some information to begin the discussion.

Basically, there are two common types of life insurance policies: Term and Whole Life Insurance.

  • Term life insurance insures that the death benefit stays the same throughout the duration of the policy. Term life insurance is particularly worth it because it's the most affordable type of life insurance available that provides a tax-free lump sum of money for a financial safety net. This is because term life insurance has no cash value, and expires before the insured is hypothetically expected to pass away. Term life insurance is right for most individuals as the cost can be dollars a day while running from 1-30 years. With term life insurance there is no risk of losing coverage, but there’s no cash value at the end of the term.

  • Whole life insurance has a cash value opponent that acts similarly to a low interest investment. Whole life doesn’t expire, so you can keep it for as long as necessary or as long as you pay the premiums. Whole life insurance is typically best for people with complex financial needs who can afford the higher premium cost.

 
 

Term Policies: Term Life and Return of Premium Term Life

Term life insurance insures that the death benefit stays the same throughout the duration of the policy. Term life insurance is particularly worth it because it's the most affordable type of life insurance available that provides a tax-free lump sum of money for a financial safety net. This is because term life insurance has no cash value, and expires before the insured is hypothetically expected to pass away. Term life insurance is right for most individuals as the cost can be dollars a day while running from 1-30 years. With term life insurance there is no risk of losing coverage, but there’s no cash value at the end of the term.

Return of Premium Term Life insurance policy offers a level premium while protecting your family. In other words it means that when the term of your life insurance policy is up you get the amount you put in as premiums returned to you, tax free, as long as you don’t die during the policy term.

 
 
 

Permanent Polices: Whole Life Insurance and Universal Life Insurance.

These two types of insurance policies are designed to last your entire life and won't expire after a certain period of time as long as required premiums are paid. The difference between the two policies are:

Whole life insurance has a cash value opponent that acts similarly to a low interest investment. Whole life doesn’t expire, so you can keep it for as long as necessary or as long as you pay the premiums or hit the maturity date. Whole life insurance is typically best for people with complex financial needs who can afford the higher premium cost.

Universal life insurance is less expensive than whole life insurance. The idea behind them is that their cash-value component accumulates interest at a rate tied to market indexes. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy, which is credited each month with interest. The downfall of this type of insurance is that once the market and interest rates hit their peak, premiums gradually increase and potentially become less affordable.

 

Simplified Issue Life and Joint Life Insurance

Simplified issue insurance allows you answer a few questions about your medical history for the life insurance application, rather than undergoing a medical exam but it could come at the cost of a more expensive and more limited life insurance policy. Since the provider is assuming more of a risk by not requiring a medical exam, the coverage amounts are capped. The cap for simplified issue life insurance varies from company to company, but most cap somewhere between $250,000 and $500,000, though some go up to $1 million. Your premiums stay the same for the life of the policy, and your coverage won’t lapse, so long as you pay your premiums on time. With this type of policy, many insurers give you the option to pay monthly, quarterly, semi-annually or annually.

Joint Life Insurance *First-to-die life insurance: This pays out upon the death of the first person. After that, the policy ends; it does not then extend to the surviving spouse. First-to-die life insurance allows the surviving spouse to use the lump sum payment to pay bills or carry-on after the first spouse dies. *Second-to-die life insurance: Also called survivorship life, this pays out when both spouses have died. It’s generally used by wealthy couples who want to make sure heirs, such as adult children, have money to pay estate or inheritance taxes.