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 The Ultimate Guide To Life Insurance

The Ultimate Guide To Life Insurance

New around here? If so, this question may be lingering in your head right now…What IS life insurance and why do I need it? (And if you’re not new around here and still have that question… that’s okay too!) You’re not alone.

While you may hear about life insurance often and understand that it’s needed, that doesn’t mean you may understand an actual thing about it or why it’s needed… Well, buckle up! You’re about to have all your questions answered because today I want to share with you what I like to call my…

Ultimate Guide to Life Insurance!

How many types of Life Insurance are there?

There are many different types of life insurance available — not just the cradle-to-grave coverage offered by insurance salespeople:

whole life insurance
whole life insurance in Massachusetts

What is Whole Life?

Whole Life offers policyholders lifetime coverage, guaranteed level premiums, and tax-deferred accumulation of cash values. In other words, this money can then be used to pay for your children’s education or mere day-to-day expenses, but you’ll pay for it.

Of all the types, this is the most expensive in terms of premiums. However, this type of insurance lets you build cash value which you can loan out. You can also surrender the insurance in exchange for the total cash value of the policy. This type of insurance is, therefore, more flexible since it offers you more options.  Moreover, you have coverage as long as you live, provided, of course, that you keep up your premium payments.

What is Level Term Life?

Term Life is the most affordable as it lets you lock in a fixed rate for the length of the policy (typically 10 or 20 years!), but it does not have any cash accumulation. So, the only way it pays is if you die.

This insurance will cover you effectively for the term or the number of years specified in your insurance contract. Within that term, you will have to pay insurance premiums regularly.  If something happens to you within that specified time period, your family or beneficiary will receive the amount of money specified in the plan. If you don’t pass within the term, you lose your premiums, unless your policy states that you get them back.

What is Decreasing Term Life Insurance?

Decreasing Term Life Insurance works pretty much the same way as Level Term Life Insurance in terms of length and what triggers the payout.  The only difference is the decreasing value of the coverage.

It’s taken out specifically to provide a contingency for repaying the policyholder’s loans and mortgages just in case they pass away before they’re able to repay them. The insurance coverage is for a specific period (usually equivalent to the life of the mortgage or loan) and the level of coverage decreases during the policy’s term — usually in conjunction with the amount of the loan or the mortgage (e.g., as the loan is repaid, the amount of cover is reduced to cover the balance remaining).  The premium remains constant during the term of the policy.

What is Universal Life?

Universal Life offers policyholders lifetime coverage, flexible premiums and death benefits, and tax-deferred accumulation of cash values with adjustable rates.

 What is Variable Universal Life?

Variable Universal Life offers policyholders lifetime coverage, flexible premiums and death benefits, tax-deferred accumulation of cash values, and a selection of investment options with adjustable rates.

 Feel like you just drank from the water hose of information? Don’t let this Ultimate Guide overwhelm you! This will all make more sense as you work through it. And if you’re not sure where to start, I’m only a “Call” away from helping you through it 🙂

 To your ultimate life decision,