Co-Founder, Coastal Financial Partners Group, California
There are two basic types of life insurance: term and permanent. Term is for temporary needs, permanent is for lifetime needs. Permanent includes whole life, universal life and variations on each. They feature a design around premiums that are set to provide for lifetime coverage. That means paying more than term costs now to have coverage you can afford for the long term and protection that you cannot outlive. The higher premium helps create cash value which, over time, keeps the coverage in force.
Permanent life insurance is generally defined by the duration of term life insurance which generally, depending upon your age, goes as long as 30 years. Permanent life insurance coverage can go as long as age 121 and as short as age 85. There are two types of permanent life insurance for indemnification: participating whole life and universal life. If you’re willing to pay the ongoing guaranteed payments, either of these will provide the coverage you need.
Participating whole life insurance can also provide supplemental retirement income for conservative long term savers. To optimize this type of policy for cash accumulation and tax advanced income, you’ll want to use a combination of a term and paid up additions rider. There are three types of current assumption universal life crediting either current interest rates, domestic and foreign indexed accounts or equity sub accounts. To optimize these polices you’ll want to establish the premium you’re willing to pay and the length of time you’re willing pay it. Then you will want to purchase the lowest TAMRA compliant death benefit and maintain it for the life of the insured.
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Participating whole life insurance can also provide supplemental retirement income for conservative long term savers. To optimize this type of policy for cash accumulation and tax advanced income, you’ll want to use a combination of a term and paid up additions rider. There are three types of current assumption universal life crediting either current interest rates, domestic and foreign indexed accounts or equity sub accounts. To optimize these polices you’ll want to establish the premium you’re willing to pay and the length of time you’re willing pay it. Then you will want to purchase the lowest TAMRA compliant death benefit and maintain it for the life of the insured.