Preparing for the future means not only ensuring that you can have a comfortable retirement, but it also includes providing financial security for your family in the event of your death.
After you open a savings account to create a sizeable nest egg for the golden years, you can then start thinking about life insurance policies. This coverage is put in place to provide monetary assistance for your spouse, children and other family members after you pass. Funeral preparations can be expensive, and your policy serves as a way for your loved ones to offset the costs.
When investing in life insurance, you have an array of options to choose from. Here is a brief overview of each:
- Term life: This policy only provides death benefits, which are funds granted to your beneficiaries following your passing. It has a set duration period for coverage, and you have to renew the policy when it expires. There are no investment benefits, and the premiums increase as you age.
- Whole life: In addition to a death benefit, this type of coverage offers a tax-sheltered investment account. The premiums are fixed and a portion goes to building equity. As an added retirement perk, you're allowed to borrow against or withdraw from the cash value you accrue.
- Universal life: This permanent life insurance policy - it lasts until you're 100 years old - combines benefits of the previous two. The premiums are lower than whole life coverage, and you get the investment component. There is no guaranteed return rate. Additionally, you are allowed to transfer money between your savings fund and policy.
- Variable life and universal life: These are also permanent policies. The investment fund is linked to a stock or bond mutual fund and there is no guarantee for returns.
- Single-premium: The death benefit payout is determined by your age, health and the amount you invest. These policies are available in whole- and variable-life options. There is an investment fund, withdrawals are allowed and contributions are tax deferred.
- Survivorship life: This policy covers the lives of two individuals, such as you and your spouse. The death benefit is only paid after you both have died. Coverage can also be part of your business banking options, as it can apply to you and a business partner.
For more information on effective wealth management strategies, contact Landmark Bank.
Investment products and services are not FDIC insured, not insured by any federal government agency, not a deposit or bank obligation, not financial institution guaranteed, subject to investment risk, including potential principal loss.
Back to Blog