Types

 

What is Term Life Insurance?

Term life insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection for a specified period of time, such as 10, 20 or 30 years.1 If you die within the term period and the policy is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your term life insurance policy is renewed. There is no “accumulation” element, or cash value with term life insurance.

Who’s it for?

  • People with a temporary need for life insurance protection. 
  • Those who need a large amount of insurance protection but have limited budgets. 
  • People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).

Benefits of Term Life Insurance:

  • It provides insurance protection for a low cost (at least initially).  
  • If your needs change, most term life insurance policies allow you to convert to a permanent life insurance policy without having to take a medical exam or provide other information about your health. 
  • Term life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses). 
  • Death benefits are generally received free from income tax.

Things You Should Consider:

  • Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value element with term life insurance, so you miss the tax-deferred growth of the cash value of permanent life insurance policies, such as Whole Life Insurance. 
  • Once the term period expires, unless you renew your policy, the insurance coverage ceases and the policy has no further value.

 

What is Permanent Life Insurance? Permanent insurance, including Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance, can provide protection for your entire lifetime, or in certain instances up to a specific age—at which point the insurer pays the policy owner the cash value. Permanent life insurance policies can build a cash value—money that you can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education.1

Permanent life insurance policies enjoy favorable tax treatment. Cash value generally grows on an income-tax deferred basis; that means that you pay no taxes on any earnings in the policy so long as the policy remains in force.  Withdrawals or loans against the cash value are, in many cases, tax-free.1

Who’s it for?

People who…

  • May need life insurance for a long term. 
  • May be interested in accumulating policy cash value to provide funds for education, retirement or other future goals. 
  • Want to take advantage of the tax-favored treatment of cash value life insurance policies.

Benefits:

  • Over time, permanent insurance may be more economical than term   insurance since premiums do not increase with age and the policy can build a cash value. 
  • Policy loans and withdrawals provide access to your cash value.
  • Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment. 
  • If you cancel the policy, the accumulated cash value, minus any surrender charges, is yours to use as you wish.

Things You Should Consider:

  • Permanent insurance is initially more expensive than term insurance.  
  • Loans, including any unpaid loan interest, and cash-value withdrawals generally reduce the death benefit, which could leave beneficiaries inadequately protected. 
  • If you cancel or surrender the policy, or it lapses, you may have taxable income to the extent that the total of cash value and/or distributions or withdrawals exceed your basis in the policy.

 

 

What is Whole Life?
Whole Life is the most basic type of permanent life insurance. Depending on your age and health, your premium will purchase a specific face amount and accumulate cash value, as long as your premiums are paid. Generally, Whole Life premiums, while higher than term premiums, especially for younger individuals, are guaranteed not to increase. In addition, Whole Life policies can earn annual dividends which are based on MetLife’s investment, mortality, and expense experience. Dividends are not guaranteed.
Who’s it for?
People who:

  • Have a lifetime need for insurance protection
  • Prefer the high degree of safety provided by the policy’s guarantees
  • Are attracted by the policy’s ability to build tax-deferred cash values
  • Like to know that their premiums will never increase

Over time, whole life insurance may be more economical than term insurance since premiums do not increase with age and the policy builds cash value.

  • Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment.
  • Policy loans and withdrawals provide access to your cash value. Loans, withdrawals and any unpaid loan interest generally reduce the death benefit, which could leave beneficiaries inadequately protected. Loans reduce the cash value and death benefit by the amount of the loan outstanding plus interest and may affect them permanently.
  • If you cancel the policy, the accumulated cash value is yours to use as you wish. Taxes may apply.
  • Dividends can be taken in cash or used to increase the policy’s cash value and death benefit. This means that certain “dividend options” may be used to purchase additional insurance coverage each year, regardless of your health.
  • Premiums are initially more costly than term premiums, although they remain level for the life of the policy. Premiums are guaranteed not to increase over the life of the policy.
  • A minimum death benefit is guaranteed.
  • The cash value is guaranteed to grow at a specified, minimum rate.
FRIENDS COME AND GO BUT FAMILY IS FOREVER. You have the power to make a difference in the lives of people who matter the most – your family. Guarantee Advantage ULSM can protect your family’s future.

Why Guarantee Advantage ULSM ?*

Guarantee Advantage UL can offer you and your loved ones the following:

Guarantees*:

  • Lifetime guaranteed protection for you
  • Lifetime guaranteed monthly income for your family

Flexibility:

  • Custom built around your life
  • Adapts as your life changes

Affordability:

  • Focused on affordable protection
  • Competitively priced

 

 

 

What is Variable Universal Life Insurance?

Equity Advantage VUL is a variable universal life insurance policy that offers a choice of death benefit guarantees and investment opportunities. Although the primary purpose of this product is to provide your selected beneficiaries with a death benefit, it also allows for access to available money within the policy while you’re alive.* Equity Advantage VUL gives you the choice of allocating your net premiums to one or more of more than 50 funding options, including a Fixed Account. Since the policy’s cash value will vary with the performance of the particular funding option(s) chosen, there are no cash value guarantees; however, there is a greater potential for growth with exposure to the market. The more conservative Fixed Account does provide cash value guarantees backed by the issuing insurance company. This product is currently available in all states.

*Withdrawn or borrowed amounts do not participate in the performance of the funding options. Poor performance of the funding options may necessitate additional premium payments, without which the policy may lapse.

Who’s it for?

People who:

  • Have a need for Life Insurance
  • Have longer time frames and a risk tolerance to weather the market
  • Want control over where their net premium dollars are allocated
  • Are interested in the potential for higher, tax-deferred cash value returns and are willing to accept risk from market fluctuations.

Benefits:

  • There is no set schedule for premium payments after the first policy year, so as your needs and goals change you may be able to increase, decrease or stop premium payments
  • Since the amount of coverage (face amount) can generally be adjusted, you may never need to purchase another life insurance policy
  • Metropolitan Life Insurance Company guarantees that the interest rate credited to the cash value in the Fixed Account will never be less than 3%
  • A minimum death benefit is guaranteed regardless of funding option performance if you maintain Guaranteed Minimum Death Benefit premium payments at specified levels
  • You can purchase a Disability Waiver of Specified Premium Amount rider for an additional cost. In the event that the insured becomes disabled, this rider applies a predetermined amount of premium to the policy, within limits so that you can maintain coverage and continue to accumulate cash value
  • The potential for your cash value to accumulate more rapidly over fixed products
  • A selection of professionally managed funding options
  • The flexibility to change the funding options in which your net premiums are invested at any time
  • The ability to transfer money among the funding options at any time, currently without charge (some restrictions may apply)

Some Drawbacks to Consider:

  • Increases in amounts of coverage require you to submit satisfactory health information to MetLife.
  • If funding option performance is poor and you have not maintained target premium payments, your death benefit could decrease depending on the death benefit option chosen, which could leave your beneficiaries inadequately protected or you may have to pay additional premium to keep the policy in force. Failure to make these additional premium payments could cause the policy to lapse with significant tax consequences
  • Equity Advantage VUL has limitations. There is no guarantee that any of the variable options in this product will meet their stated goals or objectives. The amount allocated to the variable investment options of your account balance are subject to market fluctuations so that, when withdrawn the cash surrender value may be worth more or less than the sum of premiums paid.

 

 

 

 

Compare Life Insurance Rates Instantly and Save!

 

 

Leave a Reply