The Basics of Life Insurance

The Basics of Life Insurance

Life insurance is a great way to provide financial protection to those you love. It can help replace income, pay off debts and cover final expenses.

Life insurance is also a tool for estate planning. It can provide an inheritance, help pay estate taxes and fund charitable contributions.

Term Insurance

Term life insurance is an affordable way to protect your loved ones for a specific time period, usually 5 to 20 years. During that period, your policy will pay out a death benefit to a designated beneficiary if you die during the term.

Despite its low cost, term life insurance can also be risky. For example, you may not be able to buy as much coverage as you need later in life when your health changes.

Whole life, on the other hand, provides permanent insurance protection for the insured’s entire lifetime, with premiums being paid into a cash value account. The money in this account grows over time.

Depending on the type of whole life insurance, you may also receive dividends each year. These dividends are a source of income, which could be used to cover your premiums or increase your death benefit. The dividends are a variable part of the policy, meaning they can change as your financial situation changes.

Whole Life Insurance

Whole life insurance provides permanent protection for the insured person from the time of policy issue to the date of death, provided that premiums are paid. Unlike term insurance, whole life policies are designed to build up cash value over time. This cash value can provide a source of living benefits, such as paying off a mortgage or providing for your child’s education.

Whole life policies also allow you to make tax-free withdrawals from the cash value during your lifetime. These withdrawals do reduce your death benefit, but they can offer a welcome supplement to your retirement income.

Variable Life Insurance

Variable life insurance offers flexibility and choice in how you pay premiums. This type of insurance also allows you to invest your cash value in market-based sub-accounts that may increase the potential returns/benefits you receive from your policy.

In addition, variable life insurance policies often provide tax advantages. These include deferral of investment gains (dividends, interest and capital gain) as well as the ability to withdraw or borrow from your cash value on an income tax-free basis.

MassMutual’s Executive Group Life (EGL) offers two attractive products, Strategic Group Universal Life II and Strategic Group Variable Universal Life II, that can meet the financial needs of today’s executives. Both SGUL and SGVUL are non-participating and issued by Massachusetts Mutual Life Insurance Company.

Life Insurance Tools

Life insurance is a complex subject, but one that you should take the time to learn about and understand. Whether you are considering purchasing a policy for yourself or your family, the right plan is essential to ensure your financial future is secure and your loved ones are in the event of your untimely death, taken care of. It’s also a smart idea to take some of the guesswork out of the process by utilizing the services of an experienced financial planner with a proven track record. Our team at The Ark Group is here to help you with all of your insurance needs. We are the one stop shop for all of your insurance needs and more. Our award winning customer service and state-of-the-art e-commerce system makes the experience fast and easy. The best part is you’ll have access to a large network of trusted advisors that are on hand to assist you every step of the way.

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