WHY IS LIFE INSURANCE IMPORTANT?

Life Insurance is an essential element in any individual's or family's Wealth Management strategy. It not only helps protect or preserve the wealth that has been accumulated but also does the same for lifestyle. Life Insurance provides the cash to lighten the financial burden imposed on you or your family by a death and can help to ensure the lifestyle of you and your family is maintained. Fill in the form below to get a free insurance quote!

WHAT'S THE DIFFERENCE?
 

Do you know why you have "universal" life insurance instead of "term"? As a quick refresher, use the chart below to see the basic facts and the pros and cons of the three standard types

individual insurance. We can help explain the differences, and help determine if your policy still meets your current insurance needs.

 

POLICY TYPE

TEMPORARY

PERMANENT
TERM WHOLE LIFE UNIVERSAL LIFE
Coverage Period Temporary, often expires at age 70 or 75, depending on the term in contract. Lifetime coverage Lifetime coverage
Premiums Premiums renew (increase) at each specific term (eg 5 years, 10 years) Premium remain the same for the entire contract Flexible. Premiums can be increased or decreased within certain limits
Death Benefits Does not change and is guaranteed. Does not change and is guaranteed. Dividends may be used to increase the face amount Flexible. May increase or decrease due to fluctuations in cash values
Cash Values Usually no cash values Guaranteed in contract Some guarantees. May increase or decrease due to investment returns and level of deposits.
Advantages

  • Suitable for short-term needs, or specific debt like a mortgage

  • More affordable initially, less expensive than permanent insurance.

  • Can be converted to permanent insurance without medical evidence up to age 65 or 70 (if it has a convertible option).

  • Provides protection for your entire lifetime - if kept in effect.

  • Premiums usually stay the same, regardless of age or health.

  • The cash value in universal life policies can be used to continue coverage if premiums are missed or it can be withdrawn.

  • Participating policies may receive dividends that can be taken in cash, left to accumulate with interest, or used to purchase more coverage.

  • Growth on additional deposits is not taxable unless withdrawn from the policy
Disadvantages

  • At each renewal, premiums will increase and become more costly as you get older

  • Coverage usually expires at age 70 or 75

  • With no cash value, if premiums are not paid, the policy will terminate

  • Initial cost may be too high for a sufficient amount of protection for your current needs.

  • May not be an efficient way of covering short-term needs.

  • Cash values tend to be small in early years. You have to hold the policy for a long time (at least 10 years) before cash can be sizable).

 


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GERACI FINANCIAL GROUP


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SERVING WHITBY AND DURHAM REGION
1621 McEwen Drive, Whitby, ON L1N 9A5, Canada
Phone: 905-723-7277 Fax: 905-433-0051 EMail:tony@geracifinancialgroup.com