A contract with an insurance company is a life insurance policy. An insurance company will then pay the beneficiaries one lump sum also called the death benefit. A life insurance west palm beach plan is typically entered into based off the goals and unique needs of the owner. Generally, term life insurance offers protection for a specific time period. On the other hand, permanent insurance like universal life insurance and whole life insurance offers lifetime coverage. Typically, death benefits are income tax free.
Term life insurance last for an exact period of time. During that time, the premiums are guaranteed and level. When that period of time ends, some policies provide continued coverage, typically for a higher rate. It is typically less expensive than permanent life insurance plans. Term life insurance is most commonly used as a way to replace any potential loss of income. It makes sure that there is a safety net for any beneficiaries so that financial responsibilities can still be met like paying for college and a mortgage. Term life insurance is paid in one lump sum. It is not paid in periodic payments like a paycheck is.
Universal life insurance is created to offer lifetime coverage. Universal life insurance plans can be lowered and raised throughout the plan owner’s lifetime. Universal life insurance plans offer a way to earn money over time with a tax-deferred component. Typically, universal life insurance plans have higher premiums. It is most commonly used as an estate planning strategy in order to preserve any money that will be transferred to the beneficiaries. Many people use this type of life insurance west palm beach plan when there is a need that reaches after the working years.
Whole life insurance offers lifetime coverage. Whole life plans typically cost more. Whole life plans are usually fixed and have a cash value. Whole life plans act as a way to save money and can grow over time tax-deferred. Whole life is used for estate planning to save the money that is going to be transferred to the beneficiaries.
A life insurance west palm beach plan is determined by risk related factor or rate classes in order to determine what your premium will be. A rate class is determined by family medical history, overall health, and your lifestyle. For example, any unhealthy habits like smoking can cause a life insurance west palm beach plan to be more expensive.