Answers to Your Financial Questions – Insurance Policies

Let’s Discuss Insurance Policies

It is recommended that life insurance coverage be at least 5 to 8 times your annual income. It is usually best not to change your coverage after age 35 unless it is for your benefit. Naturally, the earlier you begin, the smaller the premium.

Whole Life Insurance  
A permanent life insurance that provides protection for as long as you live.  This insurance is not changeable in premium or coverage. It has a fixed face amount and fixed premiums

Term Life Insurance
A life insurance that provides financial protection for a specified period of time. If death occurs during this period, the face amount of the policy is paid to the beneficiary.  If the insured person survives through the period of coverage, no payment is made. Term simply means that there is a limit to the time coverage.

Long-Term Care Insurance
An insurance that pays for nursing home and/or home care expenses when policyholders can no longer  care for themselves.  

Universal Life Insurance
Similar to whole life, however, premiums may be increased or decreased and the amount of insurance may also be increased or decreased.   Earnings on the cash value accumulate tax deferred.

Variable Universal Life Insurance   
A  permanent life insurance that permits the owner to vary the amount of protection and premiums and also builds cash value that can be invested in portfolios with tax deferral.

Children’s Insurance
May be provided several ways.  A child could be covered via his own term policy, covered by a rider on a parent’s policy, or he could have one of the permanent policies mentioned above.  

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