Life Insurance
There are many variations on life insurance that pay a benefit upon your death. The two main categories are term life and whole life; universal life is a subset of whole life insurance with different characteristics. Both act as asset protection insurance. Your Forest Hills Financial Group (FHFG) financial advisor can discuss the various types and how they might fit into your risk management plan now and for your future.
What Is Term Life Insurance?
Term life insurance is the most affordable coverage option, perfect for young, growing families who want to ensure children are cared for if a parent dies. It provides high levels of protection at a rate most families can afford. Term life insurance provides coverage for a defined time – typically 10, 20 or 30 years.
What is Whole Life Insurance?
Whole life insurance, also called permanent insurance, has features beyond traditional death benefit protection because, unlike term insurance, it has a cash value. A whole life insurance policy stays in effect as long as the payments are current; hence it is "permanent."
Whole Life Insurance For Small Business Owners
If you're a small business owner, you can use whole life insurance to manage risk in your business. You have all the great perks of working for yourself, but the downside is that there are no employer-sponsored benefits such as retirement plans, life insurance and sick time.
You can quickly tap into the guaranteed cash value component of whole life insurance if an unexpected circumstance arises, and generally do so without penalty. This can help keep you out of financial straits and can be used for rent or other expenses when you can’t work or an unplanned event causes a need for greater cash flow. You can also use insurance to ensure your business survives after you're gone.
What is Term to Perm Conversion?
When you've reached the end of your term life insurance contract, your coverage ends unless you renew or convert to permanent insurance. As you age, renewing a term insurance policy costs more.
Most term life policies offer the option to convert to whole life for a number of years, or sometimes for the entire length of the contract, or you may be able to add that option as a rider to your policy. You can plan from the beginning for the conversion from term life insurance to whole or universal life. Your FHFG financial advisor can help you choose the best option for you now and in the future.