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Term Life Insurance
What It Is:
Term life insurance provides coverage for a specified period, typically ranging from 10 to 30 years. It is designed to offer a death benefit if the insured dies during the term of the policy.
Term life insurance provides coverage for a specified period, typically ranging from 10 to 30 years. It is designed to offer a death benefit if the insured dies during the term of the policy.
Key Features:
- Cost-Effective: Generally the least expensive form of life insurance.
- Temporary Coverage: Coverage ends when the term expires unless renewed or converted.
- No Cash Value: Does not accumulate a cash value component.
- Income Replacement: Often used for income replacement needs during critical life stages (e.g., raising children).
Example Use Case:
A young family might purchase a 20-year term life policy to ensure that if either parent dies, the other can continue to raise their children without financial hardship.
A young family might purchase a 20-year term life policy to ensure that if either parent dies, the other can continue to raise their children without financial hardship.
Basic Term Life Insurance
Term life insurance is a type of life insurance that provides coverage for a specified period, typically ranging from five to 30 years. It offers a straightforward death benefit to beneficiaries if the insured passes away during the term, making it an ideal choice for individuals seeking affordable coverage for temporary financial needs, such as income replacement, mortgage protection, or funding children’s education. The premiums for term life insurance are generally lower than those for permanent policies because it does not accumulate cash value and only pays out if the insured dies within the policy term. At the end of the term, policyholders have options to renew the policy, convert it to a permanent life insurance policy, or allow it to lapse. While term life insurance is designed for specific financial obligations during critical periods, it offers no return on premiums if the insured survives the term, making it a cost-effective solution for those needing temporary coverage.
Convertible Term
Convertible term life insurance is a type of term life insurance that allows policyholders to convert their temporary coverage into a permanent life insurance policy, such as whole or universal life, without undergoing a new medical exam or health assessment. This feature provides flexibility for individuals who initially choose a lower-cost term policy but may want lifelong coverage in the future. Typically, convertible term policies last for a set period—commonly 10, 20, or 30 years—and if the insured outlives this term, the coverage expires unless converted. The conversion option enables policyholders to maintain their original health rating when switching to permanent coverage, which is particularly advantageous if their health has declined since purchasing the policy. While premiums for convertible term policies are generally lower than those for permanent policies, they will increase upon conversion to reflect the cost of lifelong coverage. This type of insurance is beneficial for those who anticipate needing long-term protection but prefer the affordability of term insurance in the short term.
Decreasing Term
Decreasing term life insurance is a type of renewable term life insurance that provides coverage with a death benefit that decreases over the life of the policy at a predetermined rate. This means that while the premiums typically remain constant, the amount of coverage diminishes, often aligning with the repayment schedule of debts such as mortgages or business loans. For example, if a policyholder takes out a 30-year decreasing term policy with an initial death benefit of $500,000, the benefit may decrease annually to match the declining balance of their mortgage. This type of insurance is often more affordable than level term insurance because the risk to the insurer decreases as the death benefit reduces. Decreasing term policies are particularly useful for individuals looking to secure financial obligations that diminish over time, ensuring that their beneficiaries can cover debts without incurring additional financial burdens in the event of their death. However, it’s important to note that once the policy term ends, coverage ceases, and there is no payout if the insured survives the term.
Renewable Term
Renewable term life insurance is a type of term life insurance that includes a feature allowing policyholders to extend their coverage for an additional period without undergoing new medical underwriting. This option is particularly beneficial as it provides continued protection even if the insured’s health has declined since the original policy was purchased. Typically, renewable term policies allow for annual renewals, meaning that at the end of each term—often ranging from one to several years—the policyholder can choose to renew the policy. However, premiums will likely increase with each renewal, reflecting the insured’s older age and any changes in health risk. While renewable term life insurance is generally more affordable than permanent life insurance options, it does not build cash value and only provides a death benefit. This type of insurance is ideal for individuals who may need temporary coverage but want the flexibility to extend their protection without the risk of being denied coverage due to health issues later on.
Increasing Term
Increasing term life insurance is a type of term life insurance that features a death benefit that grows over the life of the policy, typically in predetermined increments. This design helps policyholders keep pace with rising living costs, inflation, and increasing financial responsibilities, such as mortgage payments or growing family needs. For example, if you purchase a policy with a starting death benefit of $250,000 and a 5% annual increase, the benefit would rise to $312,500 after five years. While premiums may remain level or increase along with the death benefit, they are generally higher than those for level term policies due to the growing coverage. This type of insurance is particularly beneficial for individuals anticipating future expenses or those who want to ensure that their beneficiaries receive adequate financial support in the event of their passing, despite potential inflationary pressures. However, it is less common than other term life options and may require careful consideration of budget and long-term financial goals.
Joint Term
Joint term life insurance is a type of life insurance policy that covers two individuals under a single contract, making it an ideal choice for couples or business partners. This policy can be structured as either a first-to-die or second-to-die plan; in a first-to-die policy, the death benefit is paid out upon the death of the first insured individual, providing financial support to the surviving partner, while a second-to-die policy pays out after both insured individuals have passed away, often used for estate planning purposes. Joint term policies typically offer lower premiums than purchasing two separate policies, allowing for cost-effective coverage. They can also be customized as level term, decreasing term, or increasing term policies. However, potential drawbacks include the loss of coverage for the surviving partner after a first-to-die payout and complications that may arise from relationship changes. Overall, joint term life insurance provides flexible and economical protection for shared financial responsibilities.
Whole Life Insurance
What It Is:
Whole life insurance is a type of permanent life insurance that covers the insured for their entire lifetime, provided premiums are paid. It combines a death benefit with a savings component known as cash value.
Whole life insurance is a type of permanent life insurance that covers the insured for their entire lifetime, provided premiums are paid. It combines a death benefit with a savings component known as cash value.
Key Features:
- Lifelong Coverage: Remains in effect as long as premiums are paid.
- Cash Value Accumulation: Part of premiums goes into a cash value account that grows over time at a guaranteed rate.
- Tax-Deferred Growth: Cash value grows tax-deferred.
- Fixed Premiums: Premiums are generally fixed and predictable.
- Dividends: Some policies may pay dividends.
Example Use Case:
A business owner might use whole life insurance as part of an estate plan to ensure that heirs receive a tax-free inheritance.
A business owner might use whole life insurance as part of an estate plan to ensure that heirs receive a tax-free inheritance.
Indexed Universal Life (IUL) Insurance
What It Is:
IUL insurance is a type of universal life insurance that combines a death benefit with a cash value component. The cash value earns interest based on the performance of a selected stock market index.
IUL insurance is a type of universal life insurance that combines a death benefit with a cash value component. The cash value earns interest based on the performance of a selected stock market index.
Key Features:
- Flexible Premiums: Allows for flexible premium payments.
- Index-Based Growth: Cash value grows based on the performance of a selected index (e.g., S&P 500).
- Guaranteed Minimum Interest Rate: Protects against market downturns with a guaranteed minimum interest rate.
- Tax-Deferred Growth: Cash value grows tax-deferred.
- Loan Options: Policyholders can borrow against the cash value.
Example Use Case:
An investor might choose IUL to potentially grow their cash value more aggressively than traditional whole life insurance while maintaining some protection against market losses.
An investor might choose IUL to potentially grow their cash value more aggressively than traditional whole life insurance while maintaining some protection against market losses.
Universal Life Insurance
Universal Life Insurance (UL) is a type of permanent life insurance that provides policyholders with flexible premiums, adjustable death benefits, and a cash value component that accumulates over time. Unlike whole life insurance, which has fixed premiums and benefits, UL allows for adjustments to premium payments and death benefits according to the policyholder’s changing financial needs. The cash value grows tax-deferred, earning interest based on a rate set by the insurance company, which may be linked to current market rates. Policyholders can borrow against this cash value or use it to pay premiums, offering financial flexibility. UL policies also provide lifelong coverage as long as premiums are paid, ensuring that beneficiaries receive the death benefit upon the insured’s passing. This combination of flexibility, cash value growth, and lifelong protection makes Universal Life Insurance an appealing option for those looking for adaptable life insurance solutions.
Living Benefits
What They Are:
Living benefits allow policyholders to access part of their life insurance policy's death benefit while still alive, typically if they are diagnosed with a serious illness.
Living benefits allow policyholders to access part of their life insurance policy's death benefit while still alive, typically if they are diagnosed with a serious illness.
Key Features:
- Early Access to Benefits: Can be used for medical expenses or maintaining lifestyle during illness.
- Tax-Free Benefits: Often received tax-free.
- Reduced Death Benefit: The amount accessed is typically subtracted from the final death benefit.
Example Use Case:
A policyholder diagnosed with a terminal illness might use living benefits to cover medical bills or enjoy quality time with family without depleting their savings.
A policyholder diagnosed with a terminal illness might use living benefits to cover medical bills or enjoy quality time with family without depleting their savings.
Each of these products serves different financial needs and goals, from temporary protection to lifelong coverage and retirement income planning. Understanding the specifics of each can help you make informed decisions about your financial future.
Six Basic Activities of Daily Living (ADLs):
1. Bathing: The ability to wash oneself and maintain personal hygiene.
2. Dressing: The ability to put on and take off clothing.
3. Eating: The ability to feed oneself, including the ability to prepare food if necessary.
4. Toileting: The ability to use the toilet and manage personal hygiene related to toileting.
5. Transferring: The ability to move in and out of bed or a chair, including walking.
6. Continence: The ability to control bladder and bowel functions.
Activities of daily living (ADLs) are essential tasks that individuals perform regularly to take care of themselves and maintain their overall well-being. To qualify for certain living benefits in life insurance, such as chronic illness riders or long-term care riders, policyholders must demonstrate an inability to perform a specified number of these ADLs. Typically, insurers require that the insured cannot perform at least two of the six basic ADLs to access benefits.
Annuities
What They Are:
An annuity is a contract between you and an insurance company where you pay premiums in exchange for a guaranteed income stream for a set period or for life.
An annuity is a contract between you and an insurance company where you pay premiums in exchange for a guaranteed income stream for a set period or for life.
Key Features:
- Guaranteed Income: Provides a predictable income stream in retirement.
- Tax-Deferred Growth: Accumulates value on a tax-deferred basis during the accumulation phase.
- Types: Immediate, deferred, fixed, variable, or indexed.
- Risk Management: Offers protection against outliving your assets.
Example Use Case:
A retiree might purchase an immediate annuity to convert a lump sum into a guaranteed monthly income for life, ensuring they never outlive their assets.
A retiree might purchase an immediate annuity to convert a lump sum into a guaranteed monthly income for life, ensuring they never outlive their assets.
Indexed Annuities
Indexed annuities combine features of both fixed and variable annuities by linking returns to a stock market index while providing some downside protection. This means that while the returns can increase based on the performance of the selected index (such as the S&P 500), there is usually a guaranteed minimum return to protect against market losses. Indexed annuities appeal to those looking for growth potential with reduced risk, making them a popular choice among conservative investors who want exposure to equity markets without direct investment risks.
Deferred Annuities
Deferred annuities accumulate funds over time before payments begin at a future date, allowing policyholders to grow their investment tax-deferred until they are ready to retire. This type of annuity is suitable for individuals who want to save for retirement over several years or decades and prefer to delay receiving income until they reach retirement age. Deferred annuities can offer both fixed and variable options, giving investors flexibility in how their funds grow before they start receiving payouts.
Immediate Annuities
Immediate annuities start making payments almost immediately after the policyholder makes a lump sum payment. This type of annuity is ideal for retirees who need immediate income, as it converts a one-time premium into regular payments that can begin within a month. Immediate annuities provide certainty in budgeting for living expenses during retirement, but they typically do not allow for additional contributions or withdrawals once established.
Contact Us
Call: Ace
Text: Ace
Address: Office
Email: ace@believebeyondwealth.life
Parent Company: Integrity
Vision Investment Group | The Profit Circle
Our Team
CEO of Believe Beyond Wealth Group
Director, Licensed Life Insurance Agent
Ace Williams, Founder and CEO of Believe Beyond Wealth Group, is a dedicated advocate for underprivileged youth and families, inspired by his own challenging upbringing. As a full-time Early Childhood Teacher, Ace empowers students to reach their potential. Recognizing a gap in financial literacy, he became a Licensed Life Insurance Broker, integrating financial education into community programs through Believe Beyond Wealth Group & PHP. His vision includes youth programs and a charter school focused on entrepreneurship, wealth management, and personal development, aiming to equip young people with skills to thrive and drive positive change. Ace's commitment to education and economic opportunity is transforming lives and fostering a brighter future for all.
