Maintain Your Independence
Long-Term Care InsuranceWhere Insurance & Financial Planning Meet
LTCi
Long-Term Care Coverage Choices
Permanent Life Insurance is sometimes referred to as cash value insurance and should be considered when making coverage choices. Permanent insurance is offered in various policy types to meet your needs for protection and match your risk tolerance, regardless of the kind of permanent policy, this type of insurance can cover you for long periods or your entire life if you desire. Permanent plans offer different types of riders or add-ons that may be appropriate for your needs. One very popular rider can help pay for future long-term care needs.
In many instances combining both permanent and term coverage will help you obtain needed protection within your budget. Always remember that coverage is more important than the product. You may have to buy a less expensive product today and upgrade to another when your finances permit.
Risk Vs. Reward
Which policy is most appropriate for you depends on many factors. However, to start narrowing down your selection lets look at the different policies organized by risk to the buyer.
Little Risk
Products like whole life and guaranteed universal life carry little risk to the buyer. Both types of coverage operate with guarantees that depend on the policy owner paying the premiums as agreed to and the insurance company’s ability to pay the claim. We can significantly reduce any company risk by choosing highly rated carriers.
Whole Life
Whole life insurance is a permanent policy. It is also called or ordinary life. The plan was created to stay in force throughout the insureds lifetime. As long as the policy owner pays the agreed-upon premium under the policy, the policy remains in effect, regardless of any changes in health or general economic conditions.
Premiums for most whole life policies are level or unchanging. Policy costs are deducted from each premium payment, and the net amount is placed in an interest-bearing account. Over time, a whole life policy can develop cash value. The accumulated cash value funds a portion of the death benefit, which enables the insurer to pay a policy ‘s full death benefit while keeping premiums level. The cash value can potentially be withdrawn or borrowed for many different purposes
Whole Life is available in a variety of designs and has several features and options.
Guaranteed Universal Life
Guaranteed Universal Life Insurance is a product that can provide death benefit guarantees at a lower premium outlay than Whole Life Insurance. It does this by reducing or removing the cash value element from the product. GUL as its called in the industry can provide;
- Financial protection—guaranteed death benefit up to a lifetime and the assurance that market conditions won’t affect your coverage
- Guaranteed fixed premium rates—that won’t increase years from now
- Customize your policy and select the coverage amount, duration, and premium to meet your needs and budget
- A return of premium option—giving your client flexibility if their needs change in the future
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Guaranteed Variable Universal Life
Guaranteed Variable Universal Life Insurance is a product that can provide death benefit guarantees at a lower premium outlay than Whole Life Insurance. However, unlike Guaranteed (Fixed) Universal Life, Guaranteed Variable has an investment component that may or may not be suitable. The policy can provide;
- A lifetime guaranteed death benefit regardless of market performance (Requires No Lapse Feature or Rider)
- Access to potential tax-advantaged cash in the future through loans or withdrawals (Which can affect the death benefit and cash values and may cause taxation)
- Flexibility to pursue the policy investment options you want for growth potential, without impacting the guaranteed protection
- Generally, a diverse portfolio of investment options
- Optional protection can cover long-term care expenses due to temporary and permanent conditions when your primary goal is death benefit protection through an array of carrier LTC and Chronic Illness riders.
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Securities offered thru the Leaders Group, Inc. Member FINRA/SIPC, 26 W. Dry Creek Circle, Suite 800, Littleton, CO 80130, (303) 797-9080
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including attachments), unless otherwise specifically stated, was not written to be used and cannot be used for the purpose of (1) avoiding any penalties that may be imposed under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein. Federal income tax laws are complex and subject to change. The information in these presentations is based on current interpretations of the law and is not guaranteed. This does not constitute legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions.)
Some Risk
Fixed universal life is generally less costly than whole life or guaranteed universal life. The tradeoff is that the policy owner has to assume some risk. Premiums can fluctuate with changes in the cost of insurance or the fixed interest crediting rate. Decreases in the crediting rate or increases in insurance costs will require more premium to maintain the coverage to a desired future time. Monitoring the policy’s performance is crucial to preventing policy lapses.
Fixed Universal Life
Universal life
More Risk
Indexed and variable universal life have a similar cost of insurance risk as fixed universal life. However, these types of policy’s cash value crediting rates are based on investment performance. In weak performing markets, policy values may be lost or diminished by policy expenses. These types of policies offer more significant cash accumulation potential and lower premiums during strong markets. Monitoring the policy’s performance is crucial to preventing policy lapses.
Indexed Universal Life
Whole Life Insurance
Variable Universal Life
Whole Life Insurance