Ashley Brooks, CLTC
     
One Agent, One Specialty - Life Insurance.
If you need to know the difference between term and permanent life insurance call me at 1.800.223.2762

Term Insurance and Universal Life Insurance - Call Toll Free 1.800.223.2762

My Editorial on the Difference Between Term, Universal Life & Whole Life...

Universal Life - Universal Life or "UL" offers greater flexibility than whole or term life. After your initial payment, you can reduce or increase the amount of your death benefit (although to increase the amount, you'll probably have to give the insurance company medical proof that you are still in good health). Also, after your initial payment, you can pay premiums any time, in almost any amount within the policy's required minimums and maximums.  Most new universal life policies have an extended guarantee which basically means that it will cover your life, guaranteed, for as long as you live (not just to age 100).  Universal life is more expensive than term insurance in the short run, but definitely less expensive in the long run.  Universal life is like a savings account in many ways; often guaranteeing interest on the money you put in with a projection of what interest you could get.  In short, Universal Life builds cash value.  Ask yourself why you are getting the coverage.  If you are getting life insurance for IF you die, you should lean towards a term policy.  If you are looking at getting life insurance for WHEN you die, you should definitely look at a Universal Life or Whole Life Policy.  I would not recommend a "variable" policy - you know the pitfalls of the stock market in this point in time.  I advocate and sell guarantees, not "what if scenarios".
   
Term Insurance - Term insurance is the cheapest life insurance you can get.  You can get a 1 year term, a 10, 15, 20, 25, or even a 30 year term period of coverage.  Term insurance does not build cash value or gain any kind of interest.  Term insurance is usually used to cover a 15 or 30 year mortgage, a buy sell agreement (whereby one of the business owners will retire in a set amount of time), or for other reasons that would require a set amount of years to be covered.  Term insurance is the most widely used form of life insurance for IF you die, not WHEN you die.  Term Insurance brings peace of mind for those periods of time that are critical to you.  If, however, you want to leave money to heirs in the form of a life insurance policy, term insurance is not the way to go (see "a little trivia" above).  There is an option if you want to get your foot in the door with a cheap term policy - buy a term policy now and "convert" it to a permanent policy (with the same insurance company) before age 75 or before the term period expires.  This conversion is seamless - no medical questions, no doctors records...just a form to fill out.  One can convert a term policy to a permanent policy at any time after buying the term policy.  The best thing about a conversion, restated, is that you do not have to re-qualify for the coverage - in other words, you could have terminal cancer and still be eligible to convert the policy at the same rating as when you got the term policy!

Guaranteed Issue Whole Life - I carry  a company in my portfolio that will cover you no matter what your impairment.  Whether you have cancer, diabetes, lupus, heart disease, or any number of illnesses, I can get you coverage - guaranteed!  This coverage, usually for low face amounts on an individual basis (under $35,000), is provided to anyone who applies for it. There are no health or medical questions asked whatsoever. The questions deal with who will be the insured, who will own the policy, who will pay the premium, and who is the beneficiary. Guaranteed issue plans are very expensive ones, since the companies have to assume that most applicants will not be standard risks. This policy may have a graded death benefit: there are limited benefits (either a return of premium plus interest on that accumulated premium amount or a percentage of the face amount) for the first 3 years, and the full benefit is paid thereafter. If the death is from accidental causes, the full benefit may be paid even in the first 3 years. To get as much coverage as possible for a person with an uninsurable or marginal health history, a broker might have the client buy guaranteed issue coverage from several carriers. This provides, in total, the amount of coverage needed.

Simplified Issue -  This is essentially the same as Guaranteed Issue coverage, but the insurer gets to reject some applicants based on answers to a few medical questions (but far less than are asked in the “regular” underwriting process for relatively healthy people). The questions usually deal with working on a full-time basis, being diagnosed with, or treated for certain diseases (AIDA, AIDS Related Complex, cancer, heart problems), recent hospital stays or treatments, or engaging in hazardous sports or activities. Since some of the worst risks can be sifted out, rates are lower for this coverage than for guaranteed issue products, but still higher than for an underwritten one (higher than the premium with a "regular" carrier for a more healthy client.. There still may be a graded death benefit as an added protection for the insurer.  If you need advice on simplified issue or guaranteed issue it is critical that you speak with a life insurance agent.

Whole Life or Ordinary Life - Where "preferred risks" are concerned (this product may suit preferred risks better than simplified issue or guaranteed issue, ask licensed agent for details), this non-participating policy provides permanent protection at competitive premiums; building cash value along the way and endowing for the face amount. The moniker of “whole life” was attached since this coverage was designed to protect for the whole of a person’s life, usually to age 95 or 100. This contract series provides a guaranteed rate of interest to be applied to policy values (right now the guaranteed interest rate is 3-4% of the money you put in. The insurance company can credit a higher interest rate than the contractual guarantee, but does not promise to do so. The contract usually features current mortality charges as well, along with a schedule of maximum mortality costs.  Whole life is by far the most expensive form of insurance...but it may fit well for your financial situation.

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