THE ERIE'S
PIONEER FAMILY
LIFE INSURANCE
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LIFE INSURANCE QUOTE!
Term
Insurance
Cash
Value Life Insurance
Whole Life Insurance
Universal Life Insurance
Variable Life Insurance
In today's fast paced world, it's
easy to lose track of time. Your decision to protect your family or business is
one of the most important decisions you will ever make and should not be put
off. There are basically two types of life insurance: term insurance and cash
value insurance.
Term
Term insurance generally has lower premiums in
the early years, but does not build cash values that you can use in the future.
You may combine cash value life insurance with term insurance for the period of
your greatest need for life insurance to replace income.
Term insurance covers you for a term of one or
more years. It pays a death benefit only if you die in that term. Term insurance
generally offers the largest insurance protection for your premium dollar. It
generally does not build up cash value.
You can renew most term insurance policies for
one or more terms even if your health has changed. Each time you renew the
policy for a new term, premiums may be higher.
Cash Value Life Insurance
Cash value life insurance is a type of insurance
where the premiums charged are higher at the beginning than they would be for
the same amount of term insurance. The part of the premium that is not used for
the cost of insurance is invested by the company and builds up a cash value that
may be used in a variety of ways. You may borrow against a policy's cash value
by taking a policy loan. If you don't pay back the loan and the interest on it,
the amount you owe will be subtracted from the benefits when you die, or from
the cash value if you stop paying premiums and take out the remaining cash
value. You can also use your cash value to increase you income in retirement or
to help pay for needs such as a child's tuition without canceling the policy.
However, to build up this cash value, you must pay higher premiums in the
earlier years of the policy. Cash value life insurance may be one of several
types: whole life, universal life and variable life are all types of cash value
insurance.
Whole Life Insurance
Whole life insurance covers you for as long as
you live if your premiums are paid. You generally pay the same amount in
premiums for as long as you live. When you first take out the policy, premiums
can be several times higher than you would pay initially for the same amount of
term insurance. But, they are smaller than the premiums you would eventually pay
if you were to keep renewing a term policy until your later years. Some whole
life policies let you pay premiums for a shorter period such as 20 years, or
util age 65. Premiums for these policies are higher since the premium payments
are made during a shorter period.
Universal Life Insurance
Universal life is a kind of flexible policy that
lets you vary your premium payments. you can also adjust the face amount of your
coverage. Increases may require proof that you qualify for the new death
benefit. The premiums you pay (less expense charges) go into a policy account
that earns interest. Charges are deducted from the account. if your yearly
premium payment plus the interest your accounts earns is less than the charges,
your account value will become lower. If it keeps dripping, eventually your
coverage will end. To prevent that, you may need to start making premium
payments, or increase your premium payments, or lower your death benefits. Even
if there is enough in your account to pay the premiums, continuing to pay
premiums yourself means that you build up more cash value.
Variable Life Insurance
Variable life insurance is a kind of insurance
where the death benefits and cash values depend on the investment performance of
one or more separate accounts, which may be invested in mutual funds or other
investments allowed under the policy. Be sure to get the prospectus when buying
this kind of policy. You will have higher death benefits and cash value will be
lower or may disappear if the investment you chose didn't do as well as you
expected. You may pay an extra premium for a guaranteed death benefit.
