Protecting the financial security of your loved ones in the event of an untimely death is a vital concern for everyone. ISG thinks it is
paramount that every family provider understands this, and how life insurance plans can be utilized to ensure that your family is never without
sufficient income to ensure a comfortable lifestyle. Our efforts are therefore focused on helping you understand how life insurance works and providing
consultation in choosing the best possible product to fit your family's needs.
This type of insurance is characterized by a defined time period, which is stated at the time the contract is initially executed. If the contract is an
Annual Renewable Term (ART), the contract does not fall in the Temporary category. This is because the ART contract only provides coverage for one year.
Term life insurance (Term Assurance in Queen's English) provides life insurance coverage for a specified number of years for a specified premium (amount).
The policy does not accumulate cash value. Term insurance is generally considered "pure" insurance, where the premium buys protection in the event of
death and nothing else.
The three key factors to be considered when purchasing term insurance are: face amount (protection or death benefit), premium to be paid (cost to the
insured), and length of coverage (term).
Various insurance companies in the United States sell term insurance with many different combinations of these three parameters. The face amount can
remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called "Annual
Renewable Term (ART)". It is a one-year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to
the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance,
which is usually has a level premium and declining face value for the policy. The face value is intended to equal the amount of the mortgage on the
policy owner’s residence so that the mortgage will be paid if the insured dies.
Guaranteed renewability is an important policy feature for any prospective owner or insured to consider because it allows the insured to acquire life
insurance even if, at a later time, they become uninsurable as judged by industry standards.
Permanent life insurance is a life insurance policy that remains in force until the policy matures (pays out), unless the owner fails to pay the premium
when due (e.g., at which time the policy expires). The policy cannot be cancelled by the insurer for any reason except fraud in the application, and
cancellation for such fraud must be completed within a period of time defined by law (usually two years). Permanent insurance builds a cash value that
reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million-dollar face value
can be relatively inexpensive to a 70-year-old because the actual amount of insurance purchased is much less than one-million dollars. The owner can
access the cash value of the policy by withdrawing money, borrowing against the cash value, or surrendering the policy and receiving the surrender value.
Whole life insurance provides a level premium and a cash value (minimum return table included in the policy) guaranteed by the company. The primary
advantages of whole life are guaranteed death benefits, guaranteed cash values, fixed and known annual premiums, and mortality and expense charges do
not reduce the cash value shown in the policy. The primary disadvantages of whole life are premium inflexibility, and the internal rate of return in
the policy may not be competitive with other savings alternatives. Riders are available that can allow one to increase the death benefit by paying an
additional premium. The death benefit can also be increased through the use of policy dividends. Premiums are much higher than term insurance in the
short-term, but cumulative premiums are roughly equivalent if policies are kept in force until average life expectancy. The cash value can be accessed
at any time through policy "loans". Since these loans decrease the death benefit if not paid back, payback is optional. Cash values are not paid to
the beneficiary upon the death of the insured; the beneficiary receives the death benefit only.
Please feel free to contact ISG for more information, or request a free consultation to determine the right insurance plan to fit your needs.