Life Insurance

Who Needs Life Insurance?

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Most people do. Life insurance is designed to help you and your loved ones deal with the financial impact of life's unexpected events. It ensures that your family will have the financial resources it needs to meet expenses.

• Many people purchase cash value life insurance to accumulate funds for future needs, including retirement, college expenses, or simply funds for emergencies or opportunities.
• Replacing the lost income of a wage earner can make money available for child care and household maintenance.
• For young people the need for life insurance is not measured by current financial obligations but by what the future might hold. Buying life insurance when children are young is inexpensive and can guarantee their future insurability.

What Types of Life Insurance Are Available?

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There are two basic kinds of life insurance: term and permanent. Many variations of these forms of life insurance also exist, the most popular being universal life.

Eisert Insurance Service offers a wide range of products and services to fit your needs, including:

Term Life Insurance - Term insurance provides protection for a specific period of time. It pays a benefit only if you die during the term. Some term insurance policies can be renewed when you reach the end of a specific period, which can be from one to twenty years. Many policies require that evidence of insurability be furnished at renewal for you to qualify for the lowest available rates. Term insurance is considered temporary protection.

Permanent Life Insurance - Permanent insurance provides lifelong protection and is known by a variety of names. As long as you pay the necessary premiums, the death benefit always will be there. These policies are designed and priced for you to keep over a long period of time. If you do not intend to keep the policy for the long term, it could be the wrong type of insurance for you. Most permanent policies - including whole, ordinary, and universal life - have a feature, which is not found in most policies, it provides you with some options

Options

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• You can cancel or "surrender" the policy - in total or in part - and receive the cash value as a lump sum of money. If you surrender your policy in the early years, there may be little or no cash value.
• If you need to stop paying premiums, you can use the cash value to continue your current insurance protection for a specific period of time or to provide a lesser amount of protection to cover you for as long as you live.
• Usually, you may borrow from the cash value in your life insurance as collateral. Unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit.

Permanent life insurance provides you with protection as long as you live. Annual premiums are averaged over your lifetime, so the premium does not increase as you get older. As a result, the early premiums are higher than what you would pay for an equivalent amount of term insurance. In the long run, permanent insurance is more economical and compared to renewing term insurance at higher rates.

The most basic type of permanent insurance is "wholelife." Whole life policies accumulate cash values on a tax-differed basis. The cash value can be used for a variety of purposes, including:

• Pay short-term obligations with a policy loan. If you die before the loan is repaid, it is deducted from the life insurance proceeds.
• Pay premiums to keep your policy in force.
• Buy a reduced paid up policy if you wish to stop making premium payments completely.

Types of Permanent Insurance

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Whole Life or Ordinary Life - These premium amounts generally remain constant over the life of the policy.

Universal Life or Adjustable Life - This variation of permanent insurance allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the amount of the death benefit more easily than under a traditional whole life policy. (To increase your death benefit, you usually will be required to furnish the insurance company with satisfactory evidence of your continued good health.

Universal life insurance combines features of both term and permanent insurance. Universal life not only offers life insurance protection, it also accumulates cash which is credited with tax deferred interest earnings. The amount you earn depends on current interest rates.

The premiums you pay are added to the account value portion of your universal life policy. Each month a deduction is made from the account value to pay for life insurance protection and other benefits and riders. A monthly administrative fee is also deducted from the account.

Universal life is a flexible premium policy, allowing you to vary the timing and amount of your premium payments. Benefits continue as long as there is enough surrender value to pay the insurance and administrative charges

You can obtain cash from your universal life policy by borrowing or withdrawing from the account value.

Other Coverage

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• Mortgage Life Insurance - Protect your family and their home with mortgage life insurance. You can assure your family funds needed to pay off the mortgage on your home should you die.
• Retirement Planning - Tax-Deferred Annuities.

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