by Jessica Farland
Life is unpredictable. You can find yourself gratified and content one moment, and boom! The next moment you may be encompassed by dismay or misery.
Life fluctuates. A person who lacks the skills to plan and act will lag in this whimsical and fleeting world. You need to think, plan, and move in parallel to it. Money can buy you happiness – is that a fact, or mere opinion? Regardless, money can ease your life. Money can buy you comfort, luxury, and lifestyle, so plan smart and act smart; be a step ahead. Keep your priorities straight. Start by being financially stable.
The Next Step
Life insurance is an agreement between a company and an insurer in which the insurer agrees to pay a fixed sum of money in exchange for a premium upon an insured person’s death. Depending on the contract, other events such as serious illness can also trigger payment.
Life insurance can help you plan your future while ensuring your financial stability. It enables you to deal efficiently with your savings and other money. It can help distance you from unnecessary desires and keep your money safe for a bright future.
• Consider whether you can afford an insurance policy and the expenses associated with it.
• Know what kinds of insurance policies or other investment products can fulfill your needs.
• Discover the amount of insurance you need and how long you need the insurance.
• See if there are side features offered under the insurance that complement the policy itself.
Life insurance provides a protective financial cover for you and your family. It ensures that you always have financial support. Life Insurance has several types that are tailored for a variety of needs. Here’s a quick glimpse of some of the widely used policies globally:
Variable Life Insurance
A variable life insurance policy is a contract between the customer and the insurance company. It intends to meet goals such as insurance needs, investment goals, and tax planning objectives.
The appeal of variable life insurance lies in the investment element available in the policy and the favorable tax treatment of the policy’s cash value growth. Annual growth of the cash value account is not taxable as ordinary income.
Furthermore, this value can be accessible in later years. When appropriately accessed through loans using the account side-by-side, instead of direct withdrawals, it may be free of any income taxation. This insurance offers flexibility regarding premium remittance and cash value accumulation. With a variable life insurance policy, you will pay premiums into an account. The amount of the premium payments that go into the account may be less than you paid because fees were taken out of the premium payments. However, variable life insurance is a form that provides a death benefit that may be significantly larger than the amount of premiums you pay.
Indexed Universal Life Insurance
Universal life insurance exists in many different flavors, from fixed-rate models to variable ones, where you can select various accounts. Indexed universal life insurance allows the owner to allocate cash value to either a fixed account or an equity index account.
Universal life insurance has the edge over variable life insurance. Customers who need permanent life insurance protection but wish to take advantage of possible cash accumulation via an equity index might use this type. The value of the selected index is recorded at the beginning of the month and compared with the value at the end of the month. If the index increases during the month, the interest is added to the cash value.
Permanent Life Insurance
Permanent life insurance is a term for life insurance policies that do not expire. Unlike term life insurance, which promises a specified death benefit for a specific period of years, permanent life insurance lasts the insured’s lifetime, unless there is a nonpayment issue. Permanent life insurance premiums are responsible for the policy’s death benefit and allow it to build cash value.
People have different insurance requirements at different periods of their lives. Term life insurance is known for its lower premiums. However, it can expire before the end of the life of the holder. That is the reason people want to shift to a permanent policy. With the additional opportunity for savings, they can also use it as a tax-favorable investment to counter the demands of lifelong dependents.
Modern problems require modern solutions. No matter how successful or independent you are, you always need plans and backup plans. Your ability to overcome challenges and hardships is what defines your success. Life insurance provides a robust and interactive platform for you to sow the seeds of success. Having it in your plan will result in the ultimate peace of mind for the future so that you can focus on the present.
As a Colorado native, Jessica is proud to be your local Farmers® agent in Firestone, CO. She helps customers identify the insurance coverage that best fits their needs. The process is straightforward and personalized to help make clients smarter about insurance. Click here to contact her today!