The Basics you should know:
Permanent Life Insurance:
This is coverage that's designed to last for a longer period of time than
a term policy. It can be the policy that you'll keep for the rest of your
life. Premium paying period can be designed to meet your future planning
objectives. Since it has a cash equity account and the funds grow tax deferred
in the policy it can be used as a retirement supplement. If you're not sure
how long you'll need life insurance then it's a guarantee that you'll always
have coverage or that after 15, 20 or 25 years you can get your premium $$
back if you find that you don't need it anymore.
Go to Life Quote Request Form
Term Life Insurance:
Provides "pure insurance" for a period of time to cover certain needs.
It doesn't have any cash equity. It's designed to last for a certain period
of time. Essentially there are two types of plans- level premium plans where
the premium stays level for either 5, 10, 15, or 20 yrs. & annually
increasing premium policies ( also called Annual Renewable Term or ART ).
The ART policies are typically cheaper for the first two years but then become
more costly than a level premium policy. The level premium policies are very
cost effective for their initial guarantee period but then become prohibitive
in cost thereafter. The level premium plans have seen a major price war in
the last 18 months.
Go to Life Quote Request Form
Survivor Life / Joint Life Insurance: aka "2nd to Die"
This covers two lives-usually a husband and wife- and is designed to provide
funds for future estate taxes. If a married couple has an estate of at least
$1,200,000 (or project that their estate will be that size by the time both
are deceased) then Federal Estate Taxes can exceed 55% of the gross value
of the estate. The Estate taxes are due and payable in 9 months. This type
of coverage is not that expensive and can cover that future tax liability
so that the estate can be passed in its entirety to the heirs.
Universal Life Insurance
A flexible premium, interest sensitive, permanent life insurance policy under
which the policyholder may change the death benefit from time to time (with
satisfactory evidence of insurability for increases) and vary the amount
or timing of premium payments. Premiums (less expense charges) are credited
to a policy account from which mortality charges are deducted and to which
interest is credited at varying rates.
Key Person/Buy Sell Life Insurance:
Insures against loss of a Key Executive or Business Partner. Can also be
used to purchase the business interest of a partner or shareholder. If you're
a business purchasing life insurance for Key Person needs then the cash equity
can help a future stock buy back.
Go to Life Quote Request Form
Medical Savings Accounts:
Allows dollars to be deposited for Medical/Vision expenses. Funds not used
grow tax deferred and can become additional retirement funds. This can give
you a tax deduction of up to $3,375.00 per year.
(More on MSA's)
Qualified Retirement Plans:
Retirement vehicles include 401k's, SAR/SEPS, Simples, IRA's and even Defined
Contribution Plans.
Non-Qualified Retirement Plans:
If you're "maxing out" your contributions to your Qualified Plans this
provides additional methods for Tax Deferred Growth.
Employee Benefit Plans:
Includes Medical Benefits, MSA's (Medical Savings Accounts), LTD, STD, (Short
Term Disability), Group Term Life and Voluntary Benefits such as Payroll
Deduction Life Insurance. See: Employee/Group Census
Form
Disability Income Replacement: More on
Disability
Replaces income while disabled . Even if you currently have a Group
LTD plan at work We have a program that layers on top of that and can replace
up to 80% of income.
Go to Disability Quote Request Form
Estate Tax Reduction:
If a person's estate is valued at $600,000 or more and if a married couple
estate is valued at $1,200,000 or more then they need to do some Estate Planning.
We utilize a planning method to effectively deal with future estate taxes.
Email me with the specifics of your
situation.
Long Term Care: More on Long
Term Care
A long term illness and an extended stay in a Nursing Home can severely reduce
a person's assets. This policy helps pay Nursing Home costs.
The ABC's..........
Accelerated Benefits
Benefits available in some life insurance policies before death, usually
triggered by long-term, catastrophic or terminal illness. Also known as living
benefits.
Accidental Death Benefits
A provision added to a life insurance policy for payment of an additional
benefit in case of death that results from an accident. This provision is
often called "double indemnity."
Accumulation Period
The time during which a person pays money into an annuity contract and builds
up a fund to provide a deferred annuity.
Actuary
Someone professionally trained in the technical aspects of insurance and
related fields, particularly in the mathematics of insurance (the calculation
of premiums, reserves and other values).
Adjustable Life Insurance
A type of insurance that allows the policyholder to change the plan of insurance,
raise or lower the face amount of the policy, increase or decrease the premium
and lengthen or shorten the protection period.
Agent
An authorized representative of an insurance company who sells and services
insurance contracts.
Annuitant
The person entitled to receive annuity payments or who now receives them.
Annuity
A contract that provides for a series of payments, usually at regular intervals,
for the duration of life.
Annuity Certain
A contract that provides an income for a specified number of years, regardless
of life or death.
Annuity consideration
The payment, or one of the regular periodic payments, an annuitant makes
for an annuity.
Application
A statement of information made by someone applying for life insurance. The
information gathered helps the life insurance company assess whether the
risk presented by the applicant is acceptable.
Assignment
The legal transfer of one person's interest in an insurance policy to another
person.
Beneficiary
The person or financial instrument (for example, a trust fund), named in
the policy as the recipient of insurance money in the event of the policyholder's
death.
Broker
A sales and service representative who handles insurance for clients, generally
selling
insurance of various kinds and for several companies.
Business Life Insurance
Life insurance purchased by a business enterprise on the life of a member
of the firm. It is often bought by partnerships to protect the surviving
partners against loss caused by the death of a partner, or by a corporation
to reimburse it for loss caused by the death of a key employee.(Also known
as key person insurance.)
Cash Value
The amount available in cash upon surrender of a policy before it becomes
payable upon death or maturity.
Certificate
A statement issued to individuals insured under a group policy, setting forth
the essential
provisions relating to their coverage.
Claim
Notification to an insurance company that payment of an amount is due under
the terms of the policy.
Combination Plans
Life insurance policies that combine features of term and whole life policies.
Convertible Term Insurance
Term insurance that offers the policyholder the option of exchanging it for
a permanent plan of insurance without evidence of insurability.
Cost Index
A way to compare the costs of similar plans of life insurance. A policy with
a smaller index number is generally a better buy than a comparable policy
with a larger index number.
Cost-of-Living Rider
An option that permits the policyholder to purchase increasing term
insurance coverage. The death proceeds increase by a stated amount each year
to
coincide with an estimated increase in the cost of living.
Credit Life Insurance
Term life insurance issued through a lender or lending agency to cover payment
of a loan, installment purchase or other obligation, in case of death.
Current Assumption Whole Life Insurance
A variation of universal life insurance, this product involves fixed premiums
and fixed death benefits. Its cash value growth depends on market conditions.
If they are favorable and if premiums paid in the policy's first year are
large enough, premiums for one or more years may be reduced to zero.
Declination
The rejection by a life insurance company of an application for life insurance,
usually for reasons of health or occupation.
Deferred Annuity
Annuity payments that will begin at some future date.
Deferred Group Annuity
A type of group annuity providing for the purchase each year of a paid-up
deferred annuity for each member of the group, the total amount received
by the member at retirement being the sum of these deferred annuities.
Deposit Administration Group Annuity
A type of group annuity providing for the accumulation of contributions in
an undivided fundout of which annuities are purchased as the members of the
group retire.
Deposit Term Insurance
A form of term insurance, not really involving a "deposit," in which the
first-year premium is larger than subsequent premiums. Typically, a partial
endowment is paid at the end of the term period. In many cases the partial
endowment can be applied toward the purchase of a new term policy or, perhaps,
a whole life policy.
Disability Benefit
A feature added to some life insurance policies providing for waiver of premium,
and
sometimes payment of monthly income, if the policyholder becomes totally
and permanently disabled.
Dividend
An amount of money returned to the holder of a participating policy. The
money is a partial refund of the premium paid. It results from actual mortality,
interest and expenses that were more favorable than expected when the premiums
were set.
Dividend Addition
An amount of paid up insurance purchased with a policy dividend and added
to the face amount of the policy.
Dual Life Insurance
Another name for second-to-die insurance.
Endowment
Life insurance payable to the policyholder if living, on the maturity date
stated in the policy, or to a beneficiary if the insured dies before that
date.
Expectation of Life
See life expectancy.
Extended Term Insurance
A form of insurance available as a non-forfeiture option. It provides the
original amount of insurance for a limited period of time.
Face Amount
The amount stated on the face of the insurance policy that will be paid in
case of death or at maturity. It does not include dividend additions or
additional amounts payable under accidental death or other special provisions.
Family policy
A life insurance policy providing insurance on all or several family members
in one contract, generally whole life insurance on the principal breadwinner
and small amounts of term insurance on the other spouse and children, including
those born after the policy is issued.
Flexible Premium Deferred Annuity
An annuity contract that permits varying premium payments from year to year
and is often used for individual retirement accounts.
Flexible Premium Policy or Annuity
A life insurance policy or annuity under which the policyholder or contract
holder may vary the amounts or timing of premium payments.
Flexible Premium Variable Life Insurance
A life insurance policy that combines the premium flexibility feature of
universal life insurance with the equity-based benefit feature of variable
life insurance.
Fraternal Life Insurance
Life insurance provided by fraternal orders or societies to their members.
Grace Period
A period (usually 31 days) following each premium due date, other than the
first due date, during which an overdue premium may be paid. All provisions
of the policy remain in force throughout this period.
Group Annuity
A pension plan providing annuities at retirement to a group of people under
a master contract. It is usually issued to an employer for the benefit of
employees. The individual members of the group hold certificates as evidence
of their annuities.
Group Life Insurance
Life insurance that usually does not require medical examinations, on a group
of people under a master policy. It is typically issued to an employer for
the benefit of employees, or to members of an association, for example, a
professional membership group. The individual members of the group hold
certificates as evidence of their insurance.
Guaranteed Insurability
An option that permits the policyholder to buy additional stated amounts
of life insurance at stated times in the future without evidence of insurability.
Individual Policy Pension Trust
A type of pension plan, frequently used for small groups, administered by
trustees who are authorized to purchase individual level premium policies
or annuity contracts for each member of the plan. The policies usually provide
both life insurance and retirement benefits.
Individual Retirement Account (IRA)
An account set up by an individual that in some cases allows contributions
to be deducted from income and permits earnings on contributions to accumulate
tax-deferred until retirement, regardless of whether the contributions are
deductible. Under the 1986 tax law, only those who do not participate in
a pension plan at work or who do participate and meet certain income guidelines
can make tax-deductible contributions to an IRA. All others can make
contributions to an IRA on a non-deductible basis.
Industrial Life Insurance
Life insurance issued in small amounts, usually less than $1,000, with premiums
payable on a weekly or monthly basis. The premiums are generally collected
at the home by an agent of the company. Sometimes referred to as debit insurance.
Insurability
Acceptability to the company of an applicant for insurance.
Insurance Examiner
The representative of a state insurance department assigned to participate
in the official and it and examination of the affairs of an insurance company.
Insured
The person on whose life the policy is issued.
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