Personal Life Insurance

Life insurance is a crucial step in planning for your future. Not only can life insurance fulfill promises made to your family if you are no longer around, there are several life insurance plans that provide benefits while you are living.
 

Determining Your Need

The need for life insurance is dependent on your own personal and financial needs. Your agent can assist you in determining what type and amount of life insurance is appropriate for you. Generally, you should consider life insurance if:

• you have a spouse
• you have dependent children
• you have an aging parent or a physically challenged relative who depends on you for support
• your retirement savings are not enough to insure your spouse's future against a rising cost of living
• you have a sizable estate
• you own a business

There are benefits of life insurance other than providing for your loved ones in case something happens to you:

• The cash value earned and borrowed from a permanent life insurance policy can be used to help with large expenses, such as a college education or down payment on a home.
• The growth of a cash-value policy is tax-deferred - you do not pay taxes on the cash value accumulation until you withdraw funds from the policy.
• Life insurance can be used to cover funeral expenses and pay estate taxes - consult your tax advisor or financial agent for more information.

Life Changes - So Should Your Policy

Your need for life insurance is dependent on your personal and financial needs. As your life changes, your life insurance coverage may need to change as well to adapt to your current needs. Some life changes that may require a policy "tune-up" include:

• you recently married or divorced
• you have a new child or grandchild
• your health or your spouse's health has deteriorated
• you are providing care or financial assistance to a parent
• your child or grandchild requires assistance or long-term care
• you recently purchased a new home
• you are planning for a child or grandchild's education
• you are concerned about retirement income
• you have refinanced your home mortgage in the past six months
• you or your spouse recently received an inheritance

Term Life Insurance Products

Term insurance is commonly used to provide coverage when there is a need for short-term protection, or the policy owner has limited funds relative to the amount of life insurance needed. Families often purchase term with plans to convert to permanent insurance in the future.

Term insurance is also useful in situations where the policyholder is responsible for a mortgage or other bank loan and wishes to avoid leaving a financial burden to the survivors in the event of premature death.

Term does not build cash value and is the least expensive type of life insurance. Most term policies have renewable features, allowing you to extend the term of your policy without proof of insurability. In the case of Level Term, the death benefit is paid only if the insured dies during the term.

Benefits of Term Insurance

• Term rates are usually less expensive than other types of policies, allowing the maximum coverage for your dollar.
• Guaranteed renewable clauses allow you to continue your coverage at the end of a term or convert it to permanent insurance without having a medical examination. (Premiums may be higher with the renewed or converted policy.)

Term insurance is appropriate if:

• You need life insurance
• Your are on a limited budget
• You wish to purchase the maximum coverage for your premium dollar
• You desire short-term coverage (not for entire lifetime)

Whole Life Policies

Whole life policies invest a portion of the premium in an accumulation fund rather than just going for insurance protection. The benefit is having permanent insurance protection plus cash value. Earnings generated by the policy are not generally taxed while the policy is in force. In addition, to meet financial commitments such as college expenses or purchasing a home, you may be able to borrow money against the policy. Remember, however, life insurance is designed to provide protection. Additional benefits, such as borrowing money from your policy are secondary considerations.

Universal Life Products

Universal Life is a flexible life insurance policy that combines insurance coverage with a cash accumulation fund. This type of policy allows the owner to adjust the death benefit and/or premium payments, within limits, to meet the needs of the individual's situation. Net premiums are applied to the cash accumulation fund, which earns a guaranteed minimum interest rate. You have the ability to withdraw from or borrow against your cash accumulation fund. Withdrawals and loans can decrease the amount of the available death benefit. Some policies will allow you to skip premium payments and deduct the administrative fees and death benefit costs from your cash accumulation fund.

Benefits of Universal Life

• Flexibility
• You may have the ability to start and stop making premium payments
• Insurance plus cash accumulation
• Tax Deferral - With any cash value life insurance policy, the growth is income tax-deferred. Policy loans and withdrawals* are generally non-taxable

Variable Universal Life

A Variable Universal Life policy allows you personal control over the nature of the cash accumulation portion of your policy by offering a range of investment options including equity and debt securities. It is designed for you to pay more into the policy than the minimum premium and understand the benefits of doing so. The excess, less fees and charges, may be invested as you choose into a variety of investment portfolios - each with its own risk characteristics and potential for reward. Investing in equity and debt securities is a risk/return tradeoff. The possibility of a higher return requires you to assume greater risk. As with any investment, there is no guarantee of performance. In order to help moderate the risk associated with short-term market volatility, you should only consider variable universal life as a long-term plan to meet your life insurance needs.

Variable Universal Life offers insurance protection for the entire life of the individual. It allows you to "own" your policy while investing some of your payment in one or more underlying investment portfolios. We offers you life insurance products to meet your personal needs.

The Benefits of Variable Universal Life

• Tax Deferral - With any cash value life insurance policy, the growth is income tax-deferred. Policy loans and withdrawals* are generally non-taxable.
• Tax-Free Transfers - Transfers among your underlying investment options are not subject to current income or capital gains taxes, as are the majority of transfers among other investments.
• Other Tangible Benefits:
  • Diversification of investment risk of the underlying portfolios.
  • Dollar Cost Averaging** offers a strategy aimed at reducing your average cost per unit.
  • Low-to-zero net cost loan on money borrowed from the policy's accumulated cash value.
  • Tax-free income death benefit to named beneficiary.
  • Flexible premiums which may be increased or decreased to fit your economic circumstances.
  • Adjustable death benefit that can be changed as your need for insurance changes - an increase in coverage typically requires evidence of insurability.

Note: Coverage statements are general descriptions only. The full and exact contract is contained only in the policy. Product availability only in the state of Texas.  Please email an agent if you have any questions.

SBCIA - www.sbcia.com - specializes in general liability insurance, tax and financial planning in Texas.