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Universal Life Policy
With a Universal Life Policy, you can
Accumulate tax-deferred savings
Vary your premiums
Vary your benefit
Suspend payments periodically
Universal
Life
Lock in your insurability now, while you are
healthy, and start protecting your loved ones, while you build
cash for for your future.
Ask us about a personal Life Insurance Review.
We can help you determine the amount of coverage you need,
and show you how simple it is to get started!
Term Life Insurance
Term Insurance covers you for a specified
period of time, such as one, five, ten or twenty years. Once
the term is expired, you must renew it, often at much higher
rates. The policy only pays a death benefit if you die in
that period of time. Term Insurance often has specific rules
about when and how you can renew the policy.
Term Insurance rarely builds cash
value.
However, Term Insurance has the advantage
of normally providing the highest death benefit for the lowest
premium.
Ask us about which Life Insurance policy is
right for you and your loved ones. We will be happy to explain
the differences in simple, easy to understand terms.
What
is an annuity?
In its most general sense, an annuity is an agreement for
one person or organization to pay another a stream or series
of payments. Usually the term “annuity” relates
to a contract between you and a life insurance company, but
a charity or a trust can take the place of the insurance company.
There are many categories of annuities. They
can be classified by:
* Nature of the underlying investment
* Primary purpose – accumulation or pay-out (deferred
or immediate)
* Nature of pay-out commitment – fixed period, fixed
amount, or lifetime
* Tax status – qualified or nonqualified
* Premium payment arrangement – single premium
or flexible premium
An annuity can be classified in several of these categories
at once. For example, you might buy a nonqualified single
premium deferred annuity.
In general, annuities have the following attractive features:
* Tax deferral on earnings
Many investments are taxed year by year, but the earnings
in annuities aren’t taxable until you withdraw money.
This tax deferral is also true of pension plans and IRAs;
however, unlike these products, there are no annual limits
on the amount you can put into an annuity.
* Protection from creditors
If you own an immediate annuity (that is, you are receiving
money from an insurance company), generally the most that
creditors can access are the payments as they’re made,
since the money you gave the insurance company now belongs
to the company. Some state statutes and court decisions also
protect some or all of the payments from those annuities.
And your money in tax-favored retirement plans, such as IRAs
and 401(k)s, are generally protected, whether invested in
an annuity or not.
* Lifetime income
A lifetime immediate annuity converts a premium or
deposit into a stream of payments that last as long as you
do. In concept, the payments come from three “pockets”:
Your earnings and money from a pool of people in your group
who do not live as long as actuarial tables forecast. It’s
the pooling that’s unique to annuities, and it’s
what enables annuity companies to be able to guarantee you
a lifetime income.
* Benefits to your heirs
There is a common misconception about annuities that goes
like this: if you start an immediate lifetime annuity and
die soon after that, the insurance company keeps all of your
investment in the annuity. That can happen, but it doesn’t
have to. To prevent it, buy a “guaranteed period”
with the immediate annuity. A guaranteed period commits the
insurance company to continue payments after you die to one
or more beneficiaries you designate; the payments continue
to the end of the stated guaranteed period—usually 10
or 20 years (measured from when you started receiving the
annuity payments). Moreover, annuity benefits that pass to
beneficiaries don’t go through probate and aren’t
governed by your will.
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