Life Insurance
LIFE INSURANCE
There are four basic types of Life Insurance: Term coverage, Whole Life
coverage, Universal Life coverage, and Variable Universal Life coverage.
While I don’t do Variable Life I also specialize in Buy/Sell Agreements and
key-employee coverage.
Life insurance isn’t about you, but about your beneficiaries, and to get to
the point, how much you love them, how much you want to protect them.
* Term coverage: Covers your life for a certain period of time,
generally 5-30 years. Once the certain period of time is over, the insurance
is over. It is like renting insurance. Term coverage is the most inexpensive
of the four types, but also offers the simplest coverage. One novel and
popular option is Return of Premium Term Life which pays you back all your
premiums when you come to the end of the term and haven’t died.
* Whole Life coverage: Covers you for the rest of your life. You pay
the premium (generally a fixed amount) for the rest of your life. This is
permanent coverage and pays a guaranteed interest rate, accumulates cash
values, and allows the owner to take loans against the cash values.
* Universal Life coverage: Coverage is similar to whole life, however
you can choose to change your premium amount and benefits throughout the
life of the policy. This type of policy can create a “cash value”, with a
guaranteed fixed rate of interest. This is a popular type of coverage
because everyone’s lifestyle changes and this type of plan can be adapted to
your current needs and budget and enhanced down the road when income
improves. There are also market related plans which have guaranteed
minimums that prevent you losing money on your principal.
* Variable Universal Life: Coverage is similar to Universal Life;
however, it allows you to invest in the market on a tax-favored basis.
Because the market is always changing, this is a much more volatile type of
policy and subject to market losses. I do not sell these types of plans.
* Buy/Sell Agreements: A buy/sell agreement is generally funded with
Life insurance, Disability Income Protection, Critical Illness insurance,
and/or other insurance products to simplify the situation of sudden death or
critical illness among business partners. Most partnerships have these
agreements but they need insurance to fund the agreements. One partner, for
instance, would own a life policy on his partner and vice versa. If one
partner dies, the other partner has the cash available via the life pay-out
to buy his partner’s interest from the surviving spouse.
Life Insurance is a little understood product which has huge tax advantages
and can build a great foundation for a self-employed person’s retirement.
Because of the uncertainty of the stock market, as witnessed the last couple
years, this can be a very important cornerstone for retirement planning.
You would probably be astonished to see how well a permanent life plan can
help provide flexibility to your financial planning.
Glenn E. Miller, LUTCF
Independent Insurance Advisor
Jones & Associates
2436 W. Main St., Ste. 101
Medford, OR 97501
541-773-9567, toll free 1-888-707-9567
Cell 941-3084
email: glennm@jones-associates.net
www.glennmillerinsuranceadvisor.com
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