What is Life Insurance?

Life insurance is the single best way to transfer wealth. When the holder of a life insurance policy passes away the life insurance company will pay the TAX-FEE death benefit to the named beneficiary.

Life Insurance Agent St Clair Shores & Grosse Pointe MI

Types of Life Insurance

  • Term Insurance — The most common and generally the cheapest form of insurance. With term insurance you pick a specific amount of time generally 10-30 years, and a specific amount of benefit,  as long as you pay your premium if you pass away within that time limit the insurance will pay a death benefit. It’s important to note the premiums on term life will not increase during your selected term. The downside to this type of insurance is that when the term is up you will need a new policy and the money you paid into the policy is gone. The upside is that you’re still alive! 
  • Guaranteed Universal Life — .The key word here is “guaranteed.” GUL is a nice upgrade to Term Life. In a GUL policy instead of selecting a term length you select an age ranging from 95-120. As long as you do not outlive the selected age the benefit will pay out. These policies are more expensive than term policies but it's a great way to make sure your death benefit gets paid. The premiums on these policies do not increase during the life of the policy.
  • Whole LifeWhole life insurance will last your whole life. This is the cadillac of insurance policies. As long as you pay the premiums you will be covered for your …whole life. What is nice about whole life policies is that they can accumulate cash value, they can earn interest, the premiums generally do not increase, and they can earn dividends that can be used to pay the premium or buy more insurance. These policies can earn large amounts of cash value that can add a lot of flexibility to a clients portfolio. These policies can be expensive but have a lot of utility.

The Benefits of Life Insurance

life insurance offers a few special benefits to their owner

Tax-free

Transfer wealth tax-free after you pass away.

Protection

Protect your loved ones from a loss of income.

Income

It’s a great way to pay estate taxes

How Much Life Insurance Do I Need?

This can be a complicated question but to answer this as simply as we can you should have enough life insurance to pay off all of your debt and funeral when you pass away.

Life Insurance FAQ

common questions we get asked about life insurance.

The quick answer and minimum amount  is enough to cover your current debt. 

 

Most life insurance provided through the work place is only 3-5 times your annual salary and you will lose it if you no longer work there. We always suggest that you get the most life insurance your workplace has to offer because it’s often the cheapest form of life insurance that being said it’s often not enough.  How long could your family sustain itself on 3-5 years of your salary especially if one spouse has to carry all of the burden alone?

 

No. Despite what you may see in movies or on tv shows life insurance companies will pay out if the insured passes away. If a policy is inforce for 2 full years most insurance companies will even pay if the insured dies from suicide. Generally the only time a life insurance company doesn’t pay a death benefit is if you’re killed commiting a crime, doing something excluded on the policy like sky-diving, or if you’re killed in a war.

 

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