1. Lifetime insurance protection
Whole Life Insurance provides a family or business with permanent protection against the overall long-term impact of losing a family member, business owner, or employee.
- Family protection: If you pass away, Whole Life Insurance can help your loved ones replace your income or cover expenses like tuition, loans, or mortgages.
- Estate planning: Whole Life helps to ensure the orderly transfer of assets after you pass away by offering:
– liquidity to pay estate and your taxes
– assets to generate income for spouse or children
– estate equalization among heirs
- Business protection: Whole Life Insurance is ideally suited to help fund business continuity plans, including buy-sell agreements, supplemental retirement programs and the payment of loans and mortgages.
2. Asset diversification
In addition to providing a death benefit, Whole Life has lifetime benefits that are uncorrelated to most other typical asset classes. One of the unique benefits of whole life is the way it enhances the value of other assets during retirement. The presence of a guaranteed death benefit may enable you to spend down principal and interest to supplement retirement income — knowing that the principal will be replaced for your family upon your death.
4. Dividends
Whole Life from a mutual company, such as Mass Mutual, offers dividend payments to policyholders if declared by the Board of Directors. When dividends are declared, they have three components:
- Investment results: The insurance company’s current investment rate in excess of the guaranteed rate promised in the policy.
- Mortality experience: The difference between actual mortality experienced and the guaranteed mortality rate in the policy is multiplied by the net amount at risk to determine part of the dividend.
- Expense management: If the company’s expenses are lower than anticipated, those savings also help to support a more favorable dividend that year.
Policy owners may choose among several dividend options. The most popular option is to use dividends to purchase Paid-up Additions (PUA). This allows the policy owner to purchase additional guaranteed permanent paid-up insurance.
5. Taxation protection
Life insurance is viewed as a good thing for the benefit and welfare of society. Therefore, significant tax benefits have been given to it that are not found in other financial instruments.
- Income tax-free death benefits
- Tax deferred buildup of cash values inside the policy
- Access to policy values on a tax-favored basis
Whole Life Insurance provides:
- Guaranteed lifetime protection for those that you leave behind.
- A comprehensive asset that won't be impacted by market fluctuations.
- Guaranteed rates and values unlike any other financial product.
- Dividend payments that can be used in a variety of ways.
- Protection from typical asset or estate taxation.
WHAT?
Before talking with your clients about their “tomorrows”, it is important to thoroughly cover what might happen “today.” One of the fundamental life insurance products used in this professional discussion is term life insurance.
Term life insurance provides a death benefit payable to a beneficiary upon death of the insured in exchange for a premium payment. The coverage is temporary in nature and does not build policy cash value.
WHY?
The goal of life insurance is to allow a client’s family to enjoy “the same life” in financial terms that they would have experienced if the client had not died. This value is based on a concept called Human Life Value (HLV). Factors used to determine Human Life Value include planned retirement age, occupation, annual wage and employee benefits.
Term life offers affordable coverage that protects a client’s family for a set period of time. While Permanent life Insurance may offer a host of attractive features, initially it may be cash flow prohibitive for some people to purchase their total amount entirely as permanent life. So, rather than being "underinsured", the prudent choice may be for a client to use an "all Term" or a "combination of Term and Permanent" approach.
Yearly Renewable
Annually renewable term insurance (policy number 17-YRT) provides a level death benefit in exchange for an increasing annual premium payment. Both the premium and death benefit expire at the end of the term period.
Level Premium
Provides a level death benefit in exchange for a level premium based on age and term period. Both the premium and death benefit expire at the end of the term period. Term periods typically run in 10, 15, 20, or 30 year blocks.
One Year Convertible Term
It helps fill an immediate gap in financial protection at an affordable cost, and locks in insurability for conversion to permanent coverage within a year — no further proof of good health will be required. Plus, a generous conversion credit allows you to recoup nearly 100% of the premium if you decide to convert to a MML single life permanent policy at the end of the year.
