|At 3i Financial Group one of our Advisors would be happy to go through the various whole life policy options with you|
and to shop around for you in order to find the best-priced product that meets all of your requirements.
Whole Life Insurance
As its name implies whole life insurance is designed to provide coverage for the entire lifetime of the insured. The premiums are usually also guaranteed to stay level during the lifetime of the insured. In addition, whole life insurance can offer the potential for tax-deferred growth within the policy reserve. Whole life policies usually also offer additional benefits to the policyholder. For example, these types of policies offer cash surrender values (CSV’s) if a policy is terminated by the policyholder. Policy loans are also often available from insurance companies or third party lenders and sometimes for as much as 90% of the CSV. As with some other forms of permanent insurance i.e. universal life, whole life policies can offer additional non-forfeiture benefits such as: automatic premium loans, extended term insurance, and reduced paid-up insurance.
Term-100 policies offer permanent life insurance coverage but with lower premiums than whole life policies. The premiums are lower on these types of policies because they often do not offer any cash surrender values, policy loans, or non-forfeiture benefits. Once the life insured reaches 100 years of age, this type of policy may pay out a living benefit in the amount of the face value of the policy or it could go paid up. To go paid-up means that no further premium payments are required but that the policy will remain in force for the remainder of the insured’s lifetime.
Universal Life (UL)
Universal life is another type of permanent insurance and it is among the most flexible and popular life insurance products in the marketplace today. With a universal life policy the policyholder can increase the face amount of insurance, change the life insured, or add additional lives to the policy. The premium payment schedule can also be flexible. Universal life policies are divided into three separate components. One advantage of UL policies is that premiums are deposited to an investment account and then the cost of life insurance and administration is deducted from the investment account. In the meantime, the excess funds deposited into the investment account can grow on a tax-deferred basis and can be invested in a wide variety of different investment instruments. As a result, some of the gains made within the tax-deferred account can be used to pay premiums and administration costs, which can significantly reduce these costs. Some other advantages of UL policies are that the tax-deferred investments can be withdrawn and that the investment account value will also be paid to the beneficiary tax-free upon the death of the life insured.
For more detailed information or for information on additional products please speak with one of our Financial Advisors.