There are three types of life insurance, and there are many purposes that these plans are used for.
1. Term Insurance
This type of life insurance is used for temporary purposes. It is also the cheapest form of life insurance. From 10-year, 20-year, 30-year, as well as other term periods, these plans are exactly as they are named. Once the term period is over there is no more insurance. Now this does not mean you can’t continue to have insurance, you just have to pay a higher premium. These plans are not designed to be a source of permanent coverage. In the long run, these plans could end up being more expensive then a permanent plan. These plans can be used to fulfill short-term needs, for example, to help pay for the mortgage, provide income for the surviving spouse, to pay debt or medical bills. Things that may not be a permanent need.
2. Whole Life
This is a permanent form of life insurance. This type is the most costly form of life insurance. However, it is not term, so the plan as well as the premium never changes. These plans are typically used for things that are a permanent need, such as final expense planning, asset planning, asset transfers. These plans also build cash value that can be used to borrow from when needs present themselves later in the life of the policy.
3. Universal Life
Universal life is another source of permanent coverage. These plans can be used for similar purposes as whole life, but tend to have a lower cost then whole life. These plans can also provide the freedom of having a flexible premium, giving the policy owner the ability to adjust their premium when certain needs present themselves.
Both whole life and universal life can be used for other purposes other than just for the death benefit. These plans can be an excellent source of tax-free pension planning for retirement, for critical illness options, as well as long term care. To understand how each of these plans could benefit, a good agent can design the plans to best fit you needs.
Final Expense Insurance
Losing a loved one can be an overwhelming experience with decisions to be made regarding funeral plans. Final expense insurance covers the funeral costs of the departed, which saves family members from the stress of a large expense.
Many times the problem for end of life planning is not knowing what options to settle on. What if there are life changes in the future that impact the decisions you made? That’s where final expense can help. It provides the benefits you need for end of life regardless of whether you are ready to make permanent decisions. Many times you can also purchase plans that provide more life benefit than the cost, enabling you to get more services for your money.
Final expense insurance vs. life insurance
Similar to final expense insurance, life insurance also pays the beneficiary upon the death of the insured. However, there are significant differences between these policies.
Life insurance often requires a medical exam and can be denied if an applicant has a preexisting chronic condition. There is no medical exam required for final expense insurance. Most applicants are qualified after answering a health questionnaire. Even if there are certain health issues, many could still receive benefits for final expense.
What are the benefits of final expense insurance?
Final expense insurance can help your family when they need it most. Here are a few benefits to purchasing a final expense policy:
- It is designed to pay out immediately.
- Rates never increase, and benefits never decrease.
- Most people can easily qualify.
- We can also combine it with a Legacy Safeguard, providing more benefit for end of life situations.
If you are not sure whether final expense insurance is for you, we can answer your questions. Call us today at 620-669-5454 and we can help you protect your family’s future.
Due to a range of issues including injury, old age, mental, or physical illness, some individuals can find themselves in need of help performing basic tasks. Long-term care offers assistance with activities of daily living such as eating, bathing, dressing, and transferring (getting out of a chair or bed). If you are unable to do two or more of these activities, you are in need of “long-term care.”
Long-term care does not mean that your situation has to last for a long time. Some people who require care may only need help for a few months. In addition, long-term care does not only apply to nursing home facilities. You can receive home care or be provided help at an adult day care center.
You may also require “skilled care,” which refers to medical, nursing, or rehabilitative services. These services include help taking medicine, undergoing testing (e.g. blood pressure), and more. It’s important to note that most general insurance and Medicare coverage only pays for skilled care and not daily activity care. There are two issues that come with long-term care.
It can be expensive (though it’s not when you take in to context the costs it is covering), and can have strict underwriting. For this reason, it can be a good reason to offer it through your employee benefit package. There is a discount through an employer and the underwriting is more lenient.
Contact SFS today at 620-669-5454 if you’d like to learn more about your long-term care coverage options.