When purchasing life insurance, consumers have two primary options that they can choose from. These are term and permanent coverage. With a term policy, pure death benefit coverage is provided, without any cash value component. While this can provide a policy holder the benefit of low-cost coverage – especially if he or she is young and in good health – they also lose out on the many advantages that tax-deferred savings can provide. If you want to know how return of premium life insurance works or you’re looking for a million dollar life insurance policy, we can help you obtain the coverage you deserve.
Permanent policies can offer both death benefit protection along with cash value build up. Here, a policy holder can get the benefit of building tax-advantaged savings over time, meaning that no tax is due on their cash until the time of withdrawal. This can allow the funds to essentially compound exponentially over time. One type of policy in which this is especially prevalent is the level death benefit whole life insurance plan. If you are interested in buying life insurance for your parents, HSBC term life insurance, or even AICPA life insurance, we have options for you as well.
What is Level Death Benefit Whole Life Insurance?
With a level death benefit policy, coverage will remain the same amount throughout the life of the policy – and, unlike a term life policy, coverage will never expire as long as the premiums are paid. In most cases, the amount of the premium will also be locked in. Therefore, if the insured purchases the policy at a younger age, he or she can end up paying a relatively low amount of premium throughout the life of the plan.
In addition to the death benefit, whole life also offers the added cash value component whereby funds can grow and compound on a tax-deferred basis. The policyholder can withdraw or borrow these funds for whatever need that they see fit. It is important to note, however, that any unpaid cash value balance will be charged against the death benefit if the insured passes away before the balance is repaid.
Finally these policies can frequently be purchased with no medical exam. This means that the insured simply has to answer a questionnaire and will not be required any further check. You must keep in mind to fill out the questionnaire truthfully. Any false information could render the policy a fraud and only the premiums would be returned in the event that the insured were to pass away.
The Advantages of This Type of Coverage
There are a number of advantages to owning a level death policy. Although the premiums may initially start out to be higher than those of a term policy of comparable amount, over time, these premiums will oftentimes “level out” – and, the longer the policy holder keeps the plan, the more cost effective it can become.
In addition, because this type of policy can essentially be considered as part insurance coverage and part savings vehicle, it can be used for many different savings goals of the policy holder such as college planning, estate planning, and supplemental retirement savings.
Because the premiums in a level death policy are typically locked in at the same amount for life, these types of plans can also be a great tool for helping to remain on budget. This can be helpful when the policy holder is young and budget conscious, as well as at retirement and possibly living on a fixed income.
Who is a Good Candidate for this Type of Policy?
While a level death life insurance policy may not be ideal for everyone, there are some potential candidates for whom this type of coverage may be a very good fit. For example, those who have coverage needs that are long-term should consider a whole policy (as versus term coverage). Longer term needs include estate planning and income replacement, as versus mortgage payoff and college funding.
These types of plans can also work well for those who are putting coverage on a young child. This is because the premiums can be locked in at a very low amount – and will remain at that low amount throughout the remainder of the insured’s life. This can be an extremely cost-effective way to provide insurance coverage – as well as a nice way to help a child begin and continue, a long-term, tax-advantaged savings plan.
What Other Types of Whole Policies Are Available?
In addition to level death benefit policies, there are other types of whole life coverage that are available in the market place. Some of these include the following:
- Single Premium – One lump sum (or single premium) is used for purchasing the coverage. One of the biggest benefits of this type of coverage is that equity in the policy is obtained immediately rather than years in the future.
- Modified – The premiums change over time – typically with lower payments that will later increase as the insured gets older.
- Limited – Premium payments are typically not required once the insured reaches age 65.
Where to Find the Best Insurance Premium Quotes
When you’re seeking whole life insurance premium quotes, it is typically best to work with a company or an agency that has access to more than just one single insurance carrier. This is because you will want to compare insurance policies, benefits, and premium prices directly – in an unbiased manner – in order to determine which one is truly the best for you and your specific coverage needs.
If you are ready to compare, we can help. We work with many of the top life insurers in the marketplace today, and we can get you all of the important information that you require in order to make an informed buying decision. All you need to do in order to get the process is fill out the form on this page.
Should you have any additional questions throughout the process regarding how to obtain premium quotes, or even about life insurance in general, please feel free to contact us directly, toll-free, by calling 334-380-4188. Our experts will be happy to walk you through any information that you need in order to ensure that you are ready to move forward. We understand that the purchase of insurance can sometimes seem overwhelming. So contact us today – we’re here to help.