How do you know what type of life insurance policy is right for you? While the choice may not always be straightforward, some policies can lend themselves to certain life stages or specific goals better than others. The information below offers a simple breakdown of three general types of policies that Professioinal Services Group offers to help you consider what may be the most appropriate for your situation. Contact Jerry Price to learn more!
A term life insurance policy provides a guaranteed death benefit for a set period of time, such as five, ten, or 20 years, provided you continue to pay the premiums as they are due.
At the end of the term, the coverage ends unless you renew the policy or switch to another one.
Term life insurance policies have either a level term, which means that the annual premium remains the same for the life of the policy, or a graduated term, which means that the premium is smaller in the early years and grows larger each year. In most cases, level term policies cost less if you keep the policy in force for the entire term.
Term policies don’t accumulate a cash value, so you get nothing back if you end your coverage before the end of the term. However, term insurance may be less expensive than a permanent policy providing the same coverage, although the cost of coverage increases as you get older.
Term insurance is designed to provide death protection for a definite and limited period of time such as 10, 20 or 30 year term.
Universal life insurance is a type of permanent insurance that offers flexible premiums and a flexible death benefit.
Your tax-deferred cash value account accumulates at nothing less than the guaranteed rate of interest, but may accumulate at a higher rate if market rates are higher than the guaranteed rate.
You can use the money in your cash value account to pay premiums if there’s enough available. And you can also increase the amount of the death benefit without having to qualify for the additional protection. This alternative allows you to build inflation protection into your insurance.
As with other permanent policies, you may be able to borrow against your cash value account, though any outstanding loan reduces your death benefit. You also get a portion of the cash value back, minus fees and expenses, if you end the policy.
However, universal life is a more complex product than straight life and the premiums are higher for a comparable death benefit.
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Whole life insurance can provide the financial support to allow your loved ones to continue their quality of life should the unthinkable happen. This type of policy can give you and your loved ones unparalleled peace of mind.
Whole life insurance is a type of permanent life insurance that, when premiums are paid, guarantees the full death benefit and accumulates cash value. NMB offers a variety of premium payment options for whole life insurance, depending on your age and the policy’s face value. Potential options include a single premium, 10-year level premiums, 20-year level premiums, level premiums to age 70, and level premiums for the life of the policy.
Guaranteed Death Benefit
Your beneficiaries will receive an income tax-free* death benefit for the full amount you purchased upon your death.
Guaranteed Cash Values
Cash values are guaranteed and grow each year. You can take a loan against your cash value at any time, as long as your policy has a loan value. Interest will be charged on a policy loan. You can repay all or part of the loan at any time. Any outstanding loans and interest will reduce the death benefit and cash surrender value.
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As a homeowner, you may be familiar with the advantages of a bi-weekly mortgage payment program. Instead of making 12 payments per year, you make one half of your monthly payment every two weeks. This adds up to two extra half- payments per year which, when applied to the principal, can cut as much as 5-8 years off the term of a 30-year mortgage and save you thousands in future interest payments.
This Special Benefit Plan:
· Offers you the opportunity to reduce the term of your mortgage by several years.
· Could potentially save you thousands of dollars in mortgage interest.
· Provides mortgage life insurance protection that may be used to pay off your mortgage should anything happen to you or your spouse.
· Works with your current mortgage and is transferable if you refinance or purchase a new home.
· Can be initiated without refinancing or credit approval.
· Features convenient, electronically drafted mortgage payments every two weeks.
· Works with new or established mortgages
· Commercial or residential mortgages
· Works with your current lender
· No closing costs
· No credit checks
· Potentially save thousands in interest payments
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The amount of life insurance you need depends on a number of factors and can change greatly over the course of your lifetime. One way to determine how much life insurance you may need is to sit down and discuss it with Jerry Price. In the meantime, this simple calculator can help give you an idea of approximately how much coverage you need to protect your loved ones. If you find that you have questions or would like to consider more coverage, please contact us to make an appointment.
Enter 5-10 times your annual income
Enter your outstanding mortgage balance or your monthly rent times the number of months needed
Enter any credit card debt, car loan, or other outstanding loan debt
Enter the cost per month times number of months needed
Enter the estimated cost per year times four, multiplied by the number of children
Enter at least 25% of your annual income
Final Expenses (Funeral/Burial)
Typically around $10,000
Total available liquid assets
Savings/checking, retirement funds, existing life insurance, investments
Total Insurance Needed: _____________________